5 ways to make your home loan work harder

Life is full of plot twists. Since you first took out your home loan, chances are your lifestyle and goals have changed – a lot. Accumulated more kids, pets, or pot plants? Turned a lockdown side hustle into a full-time career? When your financial goals change, it makes sense that your home loan should too. Here’s how to make your home loan work harder for you.

When is reviewing your home loan a good idea?

Looking to renovate, invest, or live life a little better? Checking if your home loan is out of date, reviewing the key features and topping up or refinancing can help you achieve bigger goals. Here are five ways to get more out of your home loan.

1. Goal: Pay your home loan off sooner

Reviewing your home loan repayment frequency is a great place to start. If living mortgage-free is your priority, moving from monthly to weekly or fortnightly repayments can help you pay off your home loan sooner. Having an offset account to make repayments can also reduce the principal and interest owed, with the potential to shave years off your mortgage. You can use ME’s repayments calculator to weigh up your options.

2. Goal: Lower your cost of living

Over the last few years, we’ve seen a drop in interest rates, and lenders also offer a range of flexible home loans to suit different borrowers' needs. If lowering your living costs is the goal, consider features like split loans, where you can divide your loan between fixed and variable rate interest, redraw or offset features. 

3. Goal: Ditch the debt

If you’re looking to pay off debt and manage your finances, you can bundle together all of your debt into one single debt. You can refinance to gain access to equity and use this excess to pay off your debts. There are many factors that go into this, however. Before refinancing, you need to know how much equity you have in your home to avoid paying more than what you’d receive back.

4. Goal: Buy an investment property or holiday home

If your goal is to buy an investment property, or even just a little seaside holiday home for the fam, using home equity within your current home loan can help you with the deposit for your nest egg.

5. Goal: Renovate or upgrade your home

Whether it’s a low-cost reno or adding an entire wing to your home, topping up your current home loan can help fund your renovation. It’s as easy as getting in touch with your lender and asking to add more onto the balance of your loan.