Practical tips

There are several ways to reduce the overall cost of your mortgage.

We can give you some general tips to get you started. However, you should talk to a financial planner or tax adviser for specific advice about your loan, particularly for investment properties.

Most lenders have mortgage calculators on their websites. These can do some of the calculations to help you work out the best repayment strategy for your budget. Check your lender’s website.

Making repayments


When you’ve just taken out a loan:

  • make lump sum payments (from grants or personal savings)
  • keep your regular repayments as high as possible.

This quickly reduces the principal sum, which minimises how much interest you’ll pay later. Most lenders recalculate your interest every day.


The more of the principal you pay off with each repayment, the better. Keep your repayments the same when interest rates go down. This will mean you’re paying off more of the principal and will mean less interest later on.

‘Reducing’ mortgages

With a standard mortgage, your early repayments are mostly interest, and you only pay off a small part of the principal. As you pay off your loan, you pay less interest and more principal. A reducing mortgage will include a larger part of the principal in your repayments from the start. This means your repayments start high and get smaller over time.

General budgeting

Redirect your savings

Try to pay off the mortgage before you build up your savings. You will usually be better off paying off the mortgage than earning interest on your savings.

Extra money

If you get any unexpected money, see if you can put them straight into your mortgage.

This might be:

  • a work bonus
  • a tax return
  • an inheritance.

Make sure you consider:

  • if your lender charges penalties for extra repayments
  • whether you have a redraw facility on your loan.


Cut down on 1 small luxury item a week. Use a mortgage calculator to show just how a couple of dollars a week can save you thousands over the life of your loan.