Buying a house will probably be the single most expensive investment that you will ever make, so it’s not surprising that mortgages often take decades to pay off.

But if you’re smart about your finances, you can pay off this debt sooner and give yourself room to prepare for your next big purchase or investment.

We have seven strategies to help you pay your home loan off faster.

An extra $50 on mortgage payments could have a significant impact

1. Choose a variable rate loan over a fixed rate loan

Each of these loan types has its pros and cons. If you are looking to reduce your mortgage payments, you can opt for a variable-rate loan.

A variable rate home loan can change the interest rate of your regular payments depending on the Reserve Bank of Australia.

Variable rate loan products have a major advantage: they allow borrowers flexibility to respond based upon current interest rates. This allows them to save money and pay their loans off faster. Most lenders will let you make unlimited extra payments at no additional cost.

By contrast, you’ll need to pay fixed amounts every month for if you get a fixed rate loan – and you can only roll it over to a variable rate and make extra repayments once the fixed term ends.

2. Make repayments every time  you receive your salary

You can pay your loan off faster if you receive your salary every fortnightly. You will barely notice that you’re paying more each year.

Imagine your monthly mortgage payments are $2,200. Without accounting for interest, you’ll have repaid $26,400 by the end of the year. If you pay half or $1,100 a fortnight, you’ll have repaid $28,600. A mortgage repayment calculator can be used to estimate how much you could increase your loan’s term.

“This is because there are 12 months in a year – and 26 fortnights,” says National Australia Bank. “Effectively you squeeze in an extra month of payments each year. Even more importantly, over the life of your loan, this can shave a couple of years off.”

3. Get extra repayments

You should check if your loan product allows for additional repayments. This means that you should increase the monthly amount you pay.

If your lender permits it, you may also make lump sum payments. And if you’ve recently received a work bonus, inheritance, or tax return, consider diverting some of these funds towards your loan.

According to data modelling done by AMP Bank, homeowners can save significant interest and pay their mortgage off much quicker.

The model shows that borrowers can save up to $44,150 per month by paying $50 more each month on a $300,000.00 home loan. This will allow them to pay the loan off five years sooner. Customers with a $400,000 loan will be able to save $46,992 on interest and pay off the mortgage in four years.

It is important to note that extra payments do not count as advanced payments. If you’re thinking of taking a repayment break in the near future, speak to your mortgage broker.

4 out of 5 Aussies are not informed about interest rates

4. Look for a loan product that has a lower interest rate

It doesn’t mean you have to stick with your mortgage product forever. You can refinance your loan or switch to a lower rate to make your mortgage payment faster.

Find similar products by using loan comparison tools.

You can ask your mortgage broker to match the price or offer a lower option if you find one that is better.

Before refinancing your mortgage, however, you should make sure to do the math. You may be charged additional fees for application fees, discharge fees, mortgage insurance and ongoing fees.

Let’s just say that the benefits outweigh the cost of closing your current loan or getting another.

5. Obtain a principal and an interest loan

Principal and interest loans are the most common home mortgage product in Australia. This means that the regular repayments are able to cover both the principal and the interest for each period.

As for interest only loans, you only pay the interest on the amount you’ve borrowed for a fixed period. These loans usually have a term length of 30 years, just like standard home loans. However, they allow you to choose to only pay the interest for the first 5 years.

While an interest-only loan might seem appealing because of its low initial repayments, keep in mind that the principal does not decrease. As such, you’ll spend more money on interest and pay substantially more for the next 25 years.

6. Open a home-loan offset account

An offset account allows you to use your savings more effectively for mortgage repayments than having it in another account.  It is basically a transaction or savings account that you can attach to your mortgage.

Let’s say you have a loan of $400,000 and a 100% offset account with $50,000 in it. This means that you will pay interest on a loan only of $350,000.

In other words, the interest in your offset savings account helps you cover your mortgage’s monthly interest cost and help you pay off your loan sooner.

Moreover, an offset account can function like a normal savings account that you can conveniently access should you need extra money – though this will reduce its potential to earn interest.

1 in 5 Aussies wants to pay off the mortgage sooner

7. Split your home loan

Splitting your loan will require more research and effort. However, you can still enjoy the fixed rate and variable loan benefits. This allows you to hedge against fluctuations in interest rates, and may help you pay off your mortgage sooner.

Splitting a $400,000 home loan can be done in several ways. You can choose to split your $400,000 home loan 50:50. A fixed rate will apply to $200,000, while $200,000 will be charged at a variable rate.

The fixed half will be protected from surges in interest rates, but you wouldn’t benefit if rates drop. You can still be certain of the amount of your next payment for the half of your loan.

The variable rate section allows you to use convenience features like unlimited repayments and the creation of an offset account.

Splitting your loan can help you determine if it is beneficial for you. Additionally, you can estimate repayment amounts over the life of the loan based on you how you’re going to split your mortgage.