How much faster could I pay it off?
Even small extra contributions cut years and tens of thousands in interest from a typical mortgage.
Add an extra payment
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On top of your minimum repayment.
Many fixed-rate loans cap extra repayments. We help you find one that doesn't.
Why extra repayments compound so dramatically
Most borrowers underestimate how much faster a mortgage shrinks when you pay even a modest amount extra each month. The reason is compounding in reverse: every dollar of principal you reduce today saves you all the interest that would have accrued on that dollar for the remaining 25 or 30 years.
On a typical $600,000 loan at 6% over 30 years, an extra $200 a month — roughly the cost of one moderately enthusiastic dinner out — shortens the loan by around 4 years and saves over $80,000 in interest. Doubling that to $400/month saves over $135,000 and finishes the loan around 6 years early.
The mechanics of how extra repayments work
When you pay extra on a variable-rate loan, the additional amount goes straight to principal. Your minimum repayment doesn't change — but because you're paying down the loan faster, more of every future minimum repayment goes to principal too. The compounding effect accelerates over time.
Most variable-rate loans place your extra payments in a redraw facility, meaning you can pull the money back out if you need it. This is functionally similar to an offset account but with one key difference: redraw is technically a withdrawal from your loan, which has tax implications if the loan is for an investment property.
Watch out on fixed rates
Fixed-rate loans typically cap extra repayments at $10,000–$30,000 per year. Going over the cap can trigger a break cost. If you're on a fixed rate and want to pay extra aggressively, check your loan's product disclosure statement first or consider splitting your loan (part fixed, part variable, with extras only on the variable portion).
Extra repayments, explained.
How much faster can I pay off my mortgage?
Surprisingly fast. The compounding effect is dramatic — on a typical $600k 30-year loan, an extra $200/month finishes the loan around 4 years early and saves $80k+ in interest.
Are there limits on extra repayments?
Variable-rate loans usually allow unlimited extra repayments. Fixed-rate loans typically cap extras at $10,000–$30,000 per year, with break costs above that. Always check your loan terms.
Should I make extra repayments or use an offset account?
Both reduce interest by the same amount day-to-day, but offset balances stay fully liquid (it's a separate transaction account), while extra repayments sit in redraw — accessible but more deliberate. Many people use offset for emergency cash and direct surplus into extra repayments.
Will my minimum repayment go down if I pay extra?
No — paying extra doesn't reduce your minimum. It just means the loan is paid off earlier. Some loans allow a formal restructure to lower the minimum after substantial early repayment, but this usually defeats the purpose.
What if my rate changes?
This calculator assumes a constant rate. In reality, rates move. Higher rates erode your extra repayment benefit; lower rates amplify it. The directional point — that extra repayments save serious money — holds regardless of rate movement.