Compare home loans with extra repayments

Find home loans from a wide range of Australian lenders that best suit your needs, whether you're investing, refinancing or looking to buy your first home. Compare interest rates, mortgage repayments, fees and more. - Data last updated on 19 Sep 2019

Compare extra repayment home loans

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Home loans and voluntary extra repayments

The simplest way to reduce the amount of time it takes to pay off a home loan while simultaneously decreasing the total amount paid over the life of the loan is by making extra repayments. Most home loan providers offer the ability to make extra repayments on a home loan. However, many come with restrictions as to the extra amount you can pay or are only attached to variable interest rate home loans. It is always important to compare home loans and check the extra fees or charges and the restrictions before agreeing to take up the home loan.

How do extra repayments work?

Making extra repayments means paying more funds into your home loan account than the minimal repayments stipulated by your home loan provider. This is the easiest way to reduce interest paid on the loan and is often recommended as the most financially responsible if you have disposable cash in your savings account. Extra repayments can be made in irregular lump sum amounts or regular amounts above the minimum monthly repayment. How you proceed will depend on your personal financial position and what your home loan provider allows.

Do all home loans have the facility to make extra repayments?

The ability to make extra repayments mostly goes hand in hand with some variable interest rate home loans. In saying this, several providers do have fixed interest rate home loans but they often come with extra fees, charges or increased interest rates. They may also come with restrictions, with only a limited amount of extra repayments being allowed per year. It is always important to weigh up via a mortgage calculator whether it would be more beneficial for you to make extra repayments or to have added expenses on the loan. Plus, home loan providers may also remove other payment options to include the extra repayment option on fixed interest and variable interest loans. Some features, such as, redraw facility or offset accounts may not be available to you. 

Why should I make extra repayments?

Even if it just an extra $50 a month, putting extra repayments into a home loan is the best way to save money in the long term and reduce the life of the home loan. Also, having the home loan paid off sooner decreases the financial burden of retirement. Making the effort to arrange extra repayments into a home loan may also promote budgeting behaviours in all parts of your life, making your financial position better overall. 

Are there fees and charges for making extra repayments?

Your chosen home loan provider should specify any additional fees and charges for making extra repayments. Many variable interest rate loans or fixed rate loans with higher rates of interest will offer the service without the added cost as an incentive. Many providers also have restrictions on the amount you can repay over the minimum amount, and if you go over this you may be charged. Also, watch out for early repayment fees and early exit fees if you end up paying before you need to or if you terminate your home loan early by paying off the balance.

FAQs

Additional payments to your home loan above the minimum monthly instalments, which can help to reduce the loan’s term and remaining payable interest.

^Words such as "top", "best", "cheapest" or "lowest" are not a recommendation or rating of products. This page compares a range of products from selected providers and not all products or providers are included in the comparison. There is no such thing as a 'one- size-fits-all' financial product. The best loan, credit card, superannuation account or bank account for you might not be the best choice for someone else. Before selecting any financial product you should read the fine print carefully, including the product disclosure statement, fact sheet or terms and conditions document and obtain professional financial advice on whether a product is right for you and your finances.

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