2 benefits of paying off your home loan early

Wondering if it’s worth paying off your home loan early? Learn two practical benefits that could help you save on interest and boost your financial freedom.

Being a homeowner is a significant achievement, but there are some benefits that you could unlock if you’re considering paying off your mortgage earlier.  

1. To reduce interest 

Interest is the cost you need to pay back to the lender or bank for borrowing their money. The amount of interest charged to your home loan during the life of a loan can accumulate substantially. By paying off your home loan faster, you can potentially save yourself paying off additional interest and the overall amount you pay. 

2. To build equity faster

Equity is the difference between the value of your property and the amount you still owe on your home loan. It can build up over time as you reduce your loan amount with principal and interest repayments, and if the market value of the property increases. When you pay off your home loan faster, this will help increase the amount of equity you can tap into to borrow more money to use as a deposit for your next home or investment property. 

You could also refinance your home loan to a shorter term or to low rates, like ours at Unloan. Learn more about our features. 

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Calculations are not a loan approval. Applications are subject to credit approval, satisfactory security and minimum deposit requirements. Full terms and conditions will be set out in our loan offer, if an offer is made.

^Rates shown are inclusive of a 0.01% p.a. discount off our reference rate. On each anniversary of your loan’s settlement date, you will receive an additional discount of 0.01% per annum, up to a maximum discount of 0.30% per annum. For purchase loans with a Loan to Value Ratio (LVR) between 80.01% - 90% LVR, a lenders mortgage insurance (LMI) premium and higher interest rate apply. In some cases depending on the property’s location or type, LMI may also be required for LVR between 70.01% and 80%.

*Comparison rate is calculated on a $150,000 secured loan over a 25 year term. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.