How to change your mortgage repayment amount or frequency of repayments

19 January 2017

If you wish you could pay off your home loan faster, you can change the frequency of home loan repayments or change mortgage repayment amount.

Having to pay off a home loan is a fact of life for most Australian households, and the most visible reminder of this obligation is your monthly mortgage repayment. Your monthly payment towards that giant mortgage debt is a bit of a balancing act: do you pay more each month so as to reduce your loan more quickly, or pay less and have more money left to spend on things you enjoy?

Flexibility in home loan repayments is a very handy option to have: it enables to you change your mortgage repayment amount to reflect your current financial priorities. The question is, how do you change your home loan repayments? Which providers allow for more flexibility than others? Read on for our explanation of exactly how it works.



How can I change my home loan repayments?

How can I change my home loan repayments?

The method by which you change your repayments depends on your lender. Some banks have an online portal in which you can easily increase or decrease your payment amounts, while others require you to fill in an online form or call them, then speak with a lending specialist. A longer application process is just to ensure you’ll be able to meet any increased payments.

Lenders generally have several conditions in common when deciding whether you can change your mortgage repayment amount or change the frequency of your home loan repayments. Most will only allow repayment changes on variable rate home loans, in which you’re paying both principal and interest (rather than interest only loans). Some lenders do allow repayment changes on fixed-rate loans, but only up to a certain limit.

Furthermore, lenders will have a minimum repayment amount that you must meet each month – otherwise, you could reduce your payment too much and take your whole lifetime to pay it off!

If you meet these conditions, then generally banks are quite flexible with adjusting repayments. You can often select monthly, fortnightly, or weekly repayment intervals, as well as increasing your repayment amount. Some lenders will also let you make extra payments on top of your regular one if you’re extra keen to pay off your loan!



What happens when I change my repayments?

What happens when I change my repayments?


The biggest advantage of increasing your repayments, or making extra payments, is that you’ll pay off your mortgage principal (the original amount you borrowed) more quickly. This way, you’ll pay less in interest on the remaining balance and reach the end goal of being debt-free sooner.

First things first: Assess how much you’re currently paying on your loan against what you potentially could be paying, with our Mortgage Repayments Calculator. Simply input the terms of your loan and you’ll have a visual breakdown of how much you’re paying in total – including a hefty amount of interest!

Next, it’s time to see how much you money you could save in interest by making extra payments. Check out Canstar’s Extra Repayments Calculator to easily compare your current principal amount with how much you’d reduce it through higher repayments. More importantly, you can also see exactly how much interest you’ll avoid paying – and the results may just surprise you!

At the end of the day, the interest rate and principal of your mortgage matter even more than your repayment structure. If you’re looking to take out a home loan or refinance your current one, you can compare home loan products using Canstar’s star ratings:

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