What Do You Actually Need to Do to Pay Your Mortgage Off Sooner?

Everyone wants to pay their mortgage off faster. Fewer people know what that actually takes in dollar terms — and even fewer realise the plan doesn't have to look the same in year one as it does in year ten.

Let's use real numbers. Take a $600,000 loan at 6% over the standard 25-year term. Your minimum monthly repayment is $3,865.81. Leave it exactly as is for the full term and you'll pay $559,742 in interest — almost as much as the loan itself.

Here's what it takes to bring that forward.

The Three Benchmarks: 10, 15 and 20 Years

Payoff term	Monthly repayment	Extra per week	Total interest paid	Interest saved vs 25yr
25 years (minimum)	$3,865.81	—	$559,742	—
20 years	$4,298.59	+$99.87	$431,661	$128,082
15 years	$5,063.14	+$276.31	$311,365	$248,377
10 years	$6,661.23	+$645.10	$199,348	$360,395

A few things jump out of that table:

• Going from 25 to 20 years only costs you about $100 a week extra. That's one less takeaway order a night, and it saves you $128,000 in interest.

• The 15-year path costs roughly $276 extra a week — a genuine stretch for most households on a single or average combined income — but it more than doubles the interest saved.

• The 10-year path is a different conversation. An extra $645 a week is a second income's worth of repayment. For most first home buyers, this isn't realistic in year one. It usually only becomes realistic later — which is exactly the point below.

Why the "Pick a Number and Lock It In" Approach Misses the Point

Most of the mortgage content out there presents these three options as if you have to choose one on day one and stick to it for the life of the loan. In reality, that's rarely how it plays out — and it doesn't need to.

Most first home buyers I work with aren't starting on their peak income. They're starting on an average income in a career that's realistically going to pay more in five to ten years — a graduate a few years into their career, a tradie about to go out on their own, a nurse or teacher moving up pay scales, someone early in a corporate role with a clear promotion path ahead. The loan is set at today's income, but the income isn't fixed — it's the one variable in this whole equation that's likely to move in your favour.

That means the smartest payoff strategy usually isn't a fixed extra repayment. It's a stepped one.

A Real-World Example

Same $600,000 loan, same 6% rate — a stepped plan instead of a fixed one

• Years 1–2: minimum repayment only — $3,865.81/month

• Year 3 onward: +$300/month (a modest pay rise or the end of another debt)

• Year 5 onward: +$400/month on top (+$700/month total)

• Year 7 onward: +$500/month on top (+$1,200/month total)

Result: the loan is paid off in around 17 years and 4 months — nearly 8 years faster than the minimum term — with total interest of roughly $390,850, a saving of about $169,000 compared to sticking to minimums the whole way. And none of those increases required a lifestyle sacrifice in year one; they were funded by income growth that was already likely to happen.

The Habit That Actually Makes This Work

"When your income goes up, your repayment goes up first — before your lifestyle does."

A pay rise, a bonus, a tax return, a side income kicking in — the temptation is to let it lift day-to-day spending. The households who genuinely bring their mortgage forward are the ones who redirect some or all of that increase straight into extra repayments before it becomes part of their normal budget. It never feels like a sacrifice, because you never adjusted your spending up to meet it in the first place.

A few practical ways to make this easy rather than something you have to remember to do:

Get the extra money onto the loan — and be honest about which tool keeps it there

Offset accounts and redraw both reduce the interest you're charged, but they work differently in practice. An offset sits alongside your loan as a separate savings balance — visible, and a growing balance sitting in an account with your name on it is exactly the kind of thing that quietly gets "borrowed from" for a holiday or a new car, eroding the benefit before you've noticed it happening. A redraw puts the money into the loan itself, so accessing it takes a deliberate extra step rather than a tap on a savings account. For most people I work with, that small bit of friction is the difference between extra repayments that actually stay extra and ones that slowly leak away. Offset accounts do have real advantages — flexibility, and for some borrowers a genuine tax benefit if the property is ever turned into an investment — but they're only as effective as your discipline in leaving the balance alone. It's worth being clear-eyed about which one suits how you actually behave with money, not just which one sounds better on paper.

• Set your extra repayments to increase automatically at each pay review or EBA increase, rather than deciding fresh each time — decisions you don't have to actively make are decisions you're more likely to stick to.

• Direct lump sums — tax returns, bonuses, inheritance — straight onto the loan rather than letting them sit in a transaction account.

• Review your rate annually. A lender sitting on an uncompetitive rate can undo a chunk of the extra repayments you're making. This costs nothing and takes one conversation.

• Reassess every 12–24 months, not just when income changes. Circumstances shift both ways, and the plan should flex with them.

The Bottom Line

You don't need to find an extra $645 a week today to eventually pay this loan off in 10 years. You need a repayment that's honest about where your income is now, and a habit of increasing it as that income grows — which, for most people early in their career, it's realistically going to do. The households who pay their mortgage off well ahead of schedule aren't usually the ones who set the most aggressive repayment on day one. They're the ones who kept adjusting it upward as they could.

Want to see this against your own loan?

Take two minutes to check where you stand, then let's map out a repayment plan that grows with your income — not one you have to guess at.

Take the Home Loan Readiness Check →

Ian Freeman is a Perth-based mortgage broker helping first home buyers, upgraders and investors across WA. Credit Representative Number 439731 of Australian Credit Licence 384704.