Find out how making extra repayments and using an offset account could reduce your home loan interest – and the time it takes to pay off your mortgage.
When you make your principal and interest repayments, a proportion repays the principal amount and a proportion goes towards paying the interest amount.
However, for the first half of your loan term, a higher proportion of your minimum monthly repayments goes towards the interest amount. As you continue to repay your loan over the term, a higher proportion of your repayment will go towards your principal amount.
Want to see an example of a loan amount reducing? We’ve laid it out in a graph.