How to Shave 10 Years Off a 30-Year Home Loan: A $750,000 Worked Example

Updated October 2026 · General information for Australian home owners. All figures are illustrations, not quotes.

A 30-year mortgage is a bit like a long-haul flight: you will get there eventually, but the in-flight cost is shocking. On a $750,000 loan, the bank can end up collecting well over $1.6 million from you. The good news is that you can get off the plane years early without winning Lotto. Here are the real numbers, then the strategies, then a checklist.

The assumptions (so the numbers make sense)

• Loan amount: $750,000
• Term: 30 years (360 months), principal and interest
• Interest rate: 6.00% p.a. variable, held constant. This is an assumption for illustration. Your rate will differ and will move over time. Check the RBA and your lender for current rates.
• Interest is calculated monthly on the balance. Lenders differ in how they calculate, so confirm the figures with your own lender.

The baseline: what 30 years actually costs

At 6.00% over 30 years:

• Monthly repayment: about $4,497
• Total repaid: about $1,618,800
• Total interest: about $868,800, which is more than the amount you borrowed

The rate matters enormously. Same loan, same term:

A 0.5% difference in rate is worth roughly $85,000 of interest over the life of the loan. That is why shopping around and negotiating is a strategy, not an afterthought.

The target: 20 years instead of 30

To clear the same $750,000 at 6.00% in 20 years, the repayment is about $5,373 a month. That is roughly $877 a month more than the 30-year repayment.

In plain terms: about $877 a month, over the life of the loan, saves roughly $329,000 and gives you 10 years of your life back without a mortgage. That is the headline.

The "what could have been" table

Here is what each strategy does to the same loan (6.00%, starting at the standard 30-year repayment of $4,497), and what you would save compared with the full-term interest of about $868,800:

Illustrations only, assuming a constant 6.00% rate. Real rates move, which changes every number above.

Strategy 1: Pay a little extra, every month

Rounding up your repayment is the simplest approach. Even $100 a month over the life of the loan trims close to two years and saves about $59,600. Because the extra goes straight to principal, you pay interest on a smaller balance every month afterwards. Check that your loan allows extra repayments without penalty (most variable loans do; many fixed loans cap them).

Strategy 2: Pay fortnightly the smart way

A warning first: simply changing to weekly or fortnightly payments without paying any extra barely helps. At 6.00% the loan still takes about 30 years and saves only about $2,200 to $3,100 in total, because the only gain is interest being worked out slightly more often on a slightly lower balance. The real saving comes from the version below, where you pay half the monthly amount every fortnight, which sneaks in an extra repayment each year.

If you pay half your monthly repayment every fortnight, you make 26 half-payments a year, which equals 13 monthly payments instead of 12. On this loan that is about $2,248 every fortnight, and it cuts the loan to roughly 24 years 6 months, saving about $186,000. It is one extra repayment a year without feeling like it, because it lines up with your pay cycle. Confirm with your lender how it processes fortnightly payments, as some calculate interest differently.

Strategy 3: Use an offset account

An offset account is a transaction or savings account linked to your home loan. The balance in it is subtracted from the loan balance when interest is calculated. For example, $50,000 sitting in offset at 6.00% saves roughly $3,000 a year in interest (and that saving is not taxed, whereas interest earned on a regular savings account is). You keep access to the money, which makes this good for people who want flexibility. Offset accounts usually come with a slightly higher rate or a package fee, so compare the cost.

Strategy 4: Redraw and lump sums

Put bonuses, tax refunds, inheritances or side-income into the loan. A $5,000 lump sum each year shortens this loan to about 24 years 3 months. A $10,000 a year brings it to about 20 years 7 months. Many loans have a redraw facility so extra payments can be taken back out in an emergency, but check redraw rules and fees, and whether the lender can restrict access.

Strategy 5: Refinance and negotiate your rate

A lower rate is one of the biggest levers, provided you keep paying the old repayment amount. If you refinance from 6.00% to 5.50% and keep paying $4,497 a month, you finish in about 26 years 5 months and save roughly $197,000. Ask your current lender for a better rate first, then compare with a broker. Count the costs: exit fees, application fees, any valuation fees, and (if your deposit is under 20%) LMI. Compare using the comparison rate and not only the headline rate.

Strategy 6: Combine the strategies

The best results usually come from stacking small habits. A few examples at 6.00%:

• $400 extra a month plus a $5,000 lump sum each year: about 20 years 7 months, interest about $558,800
• $500 extra a month plus $5,000 a year: about 19 years 11 months, interest about $535,900
• $50,000 deposit boost upfront, plus $300 extra a month and $5,000 a year: about 18 years 9 months, interest about $467,800

Strategy 7: Keep your repayments when your rate falls (or income rises)

If rates drop and your lender lowers your minimum repayment, keep paying the old amount. The difference goes straight to principal. The same goes for pay rises: lift your repayment before the extra income becomes lifestyle.

A reality check before you go all in

• Keep an emergency fund first. Extra repayments are only helpful if you won't be forced onto a credit card at 20%.
• Check for penalties. Fixed-rate loans often limit extra repayments, and breaking a fixed term can be costly.
• Compare with other uses of money. Paying down a 6% loan is a guaranteed return of 6% (not taxed), but it may not be the best use of your money in every situation. Super contributions, other debts and investing all have different trade-offs, so talk to a licensed adviser.
• Investment loans differ. If the loan is for an investment property, tax treatment of interest changes the analysis. Talk to your accountant.
• Rates will move. Every number here changes if your rate changes, so rerun the numbers whenever it does.

Checklist: how to shave years off your loan

• Find your current balance, rate, remaining term and minimum repayment
• Ask your lender if there are limits or fees on extra repayments (especially on a fixed rate)
• Set up an automatic extra repayment straight after payday
• Switch to fortnightly repayments (half the monthly amount) if your lender allows it
• Open an offset account and park spare cash and your salary there
• Decide what bonuses, refunds and windfalls go to the loan each year
• Ask for a rate discount, then compare through a broker
• If refinancing, add up all switching costs and use the comparison rate
• Keep repayments the same if your rate drops, and lift them when your income rises
• Keep an emergency fund outside the loan
• Run your own numbers in the MoneySmart mortgage calculator and set a target payoff date
• Review every 6 to 12 months
• Get advice from a licensed broker, adviser or accountant before making big changes

A little humour to finish

Paying off a mortgage early is the adult version of finishing the last slice of pizza before it gets cold: slightly painful, deeply satisfying, and you wonder why you didn't start sooner. Do it gradually and nobody has to cancel their coffee habit entirely.

Official links

• MoneySmart (ASIC), mortgage calculator: https://moneysmart.gov.au/home-loans/mortgage-calculator
• MoneySmart (ASIC), paying off your home loan faster: https://moneysmart.gov.au
• Reserve Bank of Australia, cash rate and home loan rates: https://www.rba.gov.au
• ASIC, responsible lending and consumer protections: https://asic.gov.au
• ATO, deductions for rental property loan interest: https://www.ato.gov.au/individuals-and-families/investments-and-assets/residential-rental-properties

Disclosure and Disclaimer

This article is general information only and is not financial, credit, legal, tax or investment advice. It does not consider your objectives, financial situation or needs. The figures are illustrations based on stated assumptions (a $750,000 loan, a constant 6.00% variable rate and monthly interest calculation), not quotes or forecasts. Actual repayments, interest and loan terms depend on your lender, product, fees and rate changes. Please do your own research and obtain independent advice from a licensed financial adviser, mortgage broker, accountant and conveyancer or solicitor before making any decision. Loan approvals are subject to lender criteria. To the maximum extent permitted by law, our business, its directors, employees and brokers accept no liability for any loss or damage arising from reliance on this article.