Save thousands of dollars in interest and pay off your home loan faster with tailored repayments.
What it is
Tailored repayments is a feature you can have with most of our home loans1. It is the option to have slightly higher repayments and make small increases each year to your repayments to help pay off your home loan faster and save thousands of dollars in interest. By combining this with more frequent payments, you could save even more.
How it works
Every year (on the date you originally drew down your loan), we’ll give you the option to make a small increase in your repayments. You can choose to accept or decline this increase depending on what you can afford, and you will continue to have the option of increasing your repayments every year until you’ve paid off your home loan. Each small increase you accept year to year will help you pay off your home loan faster.
You also have other options when you first set up your home loan repayments. You can choose to make your repayments slightly higher than the minimum amount (for example, paying $640, instead of $634) and make your repayments more frequently. Both of these options can also help you pay off your loan faster.
Did you know?
On a $300,000 home loan with tailored home loan repayments, a home owner could save around $156,000 in interest and pay their home loan off in 19 years instead of 30.
Based on a comparison with a standard table loan over 30 years, at an interest rate of 6.74% p.a.
How much you could save
The table and graph below shows how tailored repayments could make it possible to be debt-free years faster by accepting the annual increase in repayments. The numbers are indicative only.
|Standard home loan repayments2||Tailored loan repayments|
|Interest rate||6.74% p.a.||6.74% p.a.|
|Loan term||30 years||18 years 7 months|
|Total interest paid||$399,970.55||$243,018.59|
|Time saved||-||11 years 5 months|
Flexibility and control over your repayments
If your income or expenses change, the tailored repayments option gives you the flexibility to change your repayments to suit your budget. Provided you keep within the original term of your loan, you can amend the amount and frequency of your repayments at any time3. Simply contact us.
Tailored repayments makes budgeting easy
Once your repayment level is set each year, it will stay that way even if interest rates change during the year. For example, if you’re on a floating rate and rates go down, you’ll pay less interest but more off your principal. But, if rates go up, you’ll pay more interest but less off your principal (but if you want, you can increase your repayments to cover the extra interest).
An automatic reminder to increase your repayments
Each year, we’ll automatically give you the option to accept a small increase in your repayments, which you can choose to accept, or decline and keep your repayments the same. Because this is automatic, you don’t have to try and remember to do it every year, we’ll do that for you.
More frequent repayments can cut the cost of your loan
Making fortnightly home loan repayments (instead of monthly) means you could pay more off your loan each year.
For example, by choosing fortnightly repayments of $250 rather than a monthly repayment of $500, means you’ll make two extra repayments a year and repay an extra $500 off your loan. That’s because there are 12 months in a year but 26 (not 24) fortnights.
Other ways to pay your loan off faster
You can increase the amount of your home loan repayments and/or make lump sum repayments.
- On some of our fixed-rate home loans you can make extra repayments up to 5% of your loan amount at the start of your fixed rate term without having to pay an early repayment charge3
- If you have a variable loan, you can pay as much as you want off your loan whenever you want.
If you’d like to know more about tailored home loan repayments, need any help, or would like to tailor your home loan repayments give us a call.
- Tailored home loan repayments are not available on Rapid Repay, Mortgage One, any of our Interest Only loans, or Progressive Drawdown loans.
- A standard or 'Table' loan, is a loan that is divided into equal regular repayments which are a mixture of principal and interest. At the beginning of the loan, most of the repayment goes towards interest costs, with a small amount of principal repaid. Over time, as the principal is reduced, a larger portion of each repayment goes towards principal as the interest cost reduces.
- With some fixed interest rates, if you increase the amount of your repayments, make lump sum repayments, or pay off the loan early, you may incur an early repayment charge.
Lending criteria, establishment or re-documentation fees apply. A Low Equity interest rate premium may apply. Not available for business purposes or packaged offers.