Managing a mortgage is one of the biggest financial responsibilities for most Australians. While many homeowners focus on securing a good interest rate, they often overlook a simple but powerful strategy: making extra repayments. Even small additional amounts – as little as $100 or $200 per month – can dramatically reduce the total interest paid and shorten the life of your loan.
Why Extra Repayments Work
When you make your regular monthly repayment, a large portion goes towards interest, especially in the early years of your loan. By adding even a small extra amount, you are paying down the principal faster.
The smaller your principal balance, the less interest the bank can charge you. Over time, this creates a compounding effect: you save money on interest, and your loan term shortens significantly.
A Simple Example
Let’s say you have a $500,000 home loan at a 6% interest rate, with a standard 30-year term.
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Without any extra repayments, you would repay the loan in 30 years and pay around $579,000 in interest.
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By adding just $200 extra each month, you could save more than $60,000 in interest and pay off your loan around 4 years earlier.
This is a straightforward example, but it highlights the power of consistent, small additional repayments.
Benefits of Making Extra Repayments
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Massive interest savings: Reduce the total amount you pay to the bank.
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Shorter loan term: Become mortgage-free years earlier.
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Financial flexibility: Free up cash sooner for investments, education, or retirement.
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Peace of mind: Less debt means less stress.
How to Get Started
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Review your budget – Find areas where you can reallocate $100–$200 per month.
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Automate repayments – Set up a direct debit to ensure consistency.
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Use windfalls wisely – Direct bonuses, tax refunds, or extra income towards your mortgage.
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Check your loan structure – Some loans have restrictions on extra repayments, so make sure your loan allows flexibility.
Expert Support for Smarter Repayments
At SW Global Finance, we help clients build repayment strategies tailored to their financial goals. Whether your priority is paying off your mortgage faster, creating investment opportunities, or simply reducing financial stress, our team can guide you through smarter, more efficient solutions.
Call/WhatsApp: +84 96 275 92 07
Email: support@sw-globalfinance.com.au
Take control of your mortgage today – even the smallest step can lead to big financial freedom tomorrow.