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10 ways to eliminate your mortage, fast!

Paying off a loan more quickly can save tens of thousands of dollars ultimately - and even small changes could result in some big savings over time.

1. Make more frequent payments.

Sounds simple enough, but setting this as a goal is essential to your overall strategy. If you have any free cash, don't let it sit around in your bank account-put it straight into your mortgage payments. The more you shave off the amount owed, the greater your equity becomes, and your future borrowing power too.

2. Set a budget.

Plan carefully how much you can really afford-especially if you're going to pay your bills with a credit card. This is an essential part of a mortgage repayment plan.

3. Pay fortnightly rather than monthly.

Ultimately, a structure whereby you pay half the usual monthly repayment fortnightly means you make about one payment extra a year. There are round 4.35 weeks per month in a 365-day year, or about 26 fortnights. With that in mind paying:

This costs $2,000 more annually in this particular case, but it's a method of increasing your payments in a balanced way.

4. Use a mortgage offset account to reduce the loan interest.

A standard variable rate loan generally offers you the option of putting 100% of your income and savings into an offset account to reduce your loan interest. So, by paying your income directly into this account you can significantly reduce the principal.

5. Pay the first home loan instalment as soon as you settle.

By making a repayment on settlement, you can reduce the principal immediately-and therefore all future interest repayments.

6. Align your mortgage repayments with your income cycle.

By synchronising your mortgage repayments with your payday you will not only ease the budgeting process but you can also be assured that what is left over can be spent on other items.

7. Don't lower your minimum regular payment if interest rates fall.

If you had the discipline to pay the higher rate before, you should use this opportunity to pay off your loan faster.

8. Split your loan.

Choosing between the security of a fixed rate loan and the flexibility of one at a variable rate can be difficult, especially when the future of interest rates is not clear. Splitting your loan allows borrowers to get the benefits of both - protection from, and limited exposure to any volatility.

9. Pay your expenses with a credit card.

This option takes solid budgeting and discipline - and it's not for everybody. However, if you use your credit card to take care of $1,000 in bills per month, and you are able to pay that amount of debt off each time, you could have that $1,000 on your mortgage permanently.

10. Use internet banking for automatic repayments.

A solid budgetary tool, this method gives you greater control over your repayments, as you can always alter what is drawn automatically.

Source: Your Mortgage. Special Edition, No.104, 2011, page 156. 10 Ways to eliminate your mortgage fast! Reproduced with permission.