Two Benefits of Paying off Your Home Loan Early

We share two benefits of paying off your mortgage earlier than your loan term.

Being a homeowner is a significant achievement, but there are some benefits that you could unlock if you’re considering paying off your mortgage earlier.  

1. To reduce interest 

Interest is the cost you need to pay back to the lender or bank for borrowing their money. The amount of interest charged to your home loan during the life of a loan can accumulate substantially. By paying off your home loan faster, you can potentially save yourself paying off additional interest and the overall amount you pay. 

2. To build equity faster

Equity is the difference between the value of your property and the amount you still owe on your home loan. It can build up over time as you reduce your loan amount with principal and interest repayments, and if the market value of the property increases. When you pay off your home loan faster, this will help increase the amount of equity you can tap into to borrow more money to use as a deposit for your next home or investment property. 

You could also refinance your home loan to a shorter term or to low rates, like ours at Unloan. Learn more about our features. 

This article is intended to provide general information only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Please consider seeking financial advice before making any decision based on this information.‍

Unloan is a division of Commonwealth Bank of Australia.

Applications are subject to credit approval; satisfactory security and you must have a minimum 20% equity in the property. Minimum loan amount $10,000, maximum loan amount $10,000,000. 

Unloan offers a 0.01% per annum discount on the Unloan Live-In rate or Unloan Invest rate upon settlement. On each anniversary of your loan’s settlement date (or the day prior to the anniversary of your loan’s settlement date if your loan settled on 29th February and it is a leap year) the margin discount will increase by a further 0.01% per annum up to a maximum discount of 0.30% per annum. Unloan may withdraw this discount at any time. The discount is applied for each loan you have with Unloan.

There are no fees from Unloan. However, there are some mandatory Government costs depending on your state when switching your home loan. For convenience, Unloan adds this amount to the loan balance on settlement.

* Other third-party fees may apply. Government charges may apply. Your other lender may charge an exit fee when refinancing.

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