By Paul Feeney, Founder and Chief Executive Officer, Otivo
There's no secret to paying off a mortgage faster, but there is a reason the ordinary methods work so well, and it's the shape of the loan itself. In the early years, most of each repayment is interest, so every extra dollar you throw at the principal early has an outsized effect. Understanding that shape is what turns small changes into years off your loan. Here's what actually speeds it up.
The fastest way to pay off a mortgage combines a few levers, making extra repayments, paying more frequently, using an offset account, and avoiding extending your loan term. Because mortgage interest is front-loaded, extra payments early save the most. As at July 2026, even modest additional repayments can take years off a typical home loan.
Why do extra repayments early matter most?
Because of how mortgage interest is calculated. In the early years of a loan, your balance is at its largest, so most of each repayment goes to interest and only a little to the principal. An extra payment made early reduces that large balance sooner, which cuts the interest charged on it for every remaining year of the loan. The same extra payment made near the end has far less time to work, which is why front-loading extra repayments delivers the biggest saving.
How do extra repayments speed up your mortgage?
Every extra dollar goes straight to the principal, the amount you actually owe. A smaller principal means less interest charged, which means more of your regular repayment then goes to principal too, creating a compounding effect in your favour. Over time that can shorten your loan term by years and save a substantial amount in interest. It's the single most direct lever most people have.
Does paying more frequently help?
It can, subtly. Switching from monthly to fortnightly repayments means you effectively make a little more than a full month's worth of repayments over a year, since there are more fortnights than twice the number of months. That extra chips away at the principal faster. The effect is modest compared with deliberate extra repayments, but it's a relatively painless way to nudge the loan down more quickly.
How does an offset account help?
An offset account is a transaction account linked to your loan, and the balance in it is offset against your loan balance when interest is calculated. So $20,000 sitting in an offset on a $400,000 loan means you're generally charged interest as though you owed $380,000, while your money stays accessible. That reduces interest without locking the cash away, which is why many people use an offset as a flexible way to pay down a mortgage faster.
What slows a mortgage payoff down?
A few habits work against you. Redrawing the extra repayments you've made puts the balance back up. Extending or resetting your loan term when you refinance stretches the interest out again. Interest-only periods pause your progress on the principal entirely. And paying only the minimum required leaves the loan running its full course. Avoiding these is as important as making extra repayments in the first place.
Frequently asked questions
What's the quickest way to pay off my home loan?
A combination works best, extra repayments, more frequent payments, an offset account, and not extending your loan term. Because interest is front-loaded, extra payments made early in the loan save the most.
Does paying fortnightly pay off a mortgage faster?
It can, because paying fortnightly generally means you make slightly more than the equivalent monthly amount over a year, chipping away at the principal a little faster. The effect is modest but genuine.
How much faster can extra repayments pay off a mortgage?
It depends on your loan size, rate and how much extra you pay, but even modest regular extra repayments can take years off a typical loan and save a meaningful amount in interest.
Where to from here
Paying off a mortgage faster is about pulling the ordinary levers deliberately. Otivo, a licensed Australian financial advice platform holding AFSL and Australian Credit Licence No. 485665, offers a debt advice module that helps you find effective ways to pay down debt while covering essentials. When customers follow Otivo's advice in full, they could be better off on average by around $52,030 through faster debt repayment. It helps you see which lever to pull first.
Sources
- ASIC MoneySmart — paying off your mortgage faster — moneysmart.gov.au
- Otivo — advice outcome data, faster debt repayment — otivo.com
Disclaimer
The information in this communication is current as at July 2026 and has been prepared by Otivo Pty Ltd ABN 47 602 457 732, AFSL and Australian Credit Licence No. 485665. This content is general information only and has been prepared without taking into account your objectives, financial situation or needs. It is not personal financial or taxation advice and should not be relied on as such. Before acting on any information, you should consider its appropriateness having regard to your personal circumstances. This material must not be reproduced in whole or in part, or posted on any social media platform, without the prior written consent of Otivo Pty Ltd.