Is it possible to pay off a home loan in your 40’s?

Yes – if you take out a home loan in your 20’s and apply some of these interest-saving techniques, as well as increase your mortgage payments as your wages increase, it’s very possible to pay off the average mortgage inside 20 years, meaning you can be mortgage-free by your 40’s.

Can I get a home loan for 30 years if it takes me past retirement age?

Yes – there is no legal limit to the age at which you can take out a loan, provided you have the means to continue loan repayments after you retire from your main job. You may have a second job, stock market investments, a superannuation retirement pension scheme or an investment property which produces an income stream after your retirement age. This could enable you to continue to pay off your loan after retirement age.

When might I want to keep my home loan open?

There are various scenarios where it may not be in your best interest to pay off your home loan. For example, you may be a guarantor for your child’s mortgage, using your home equity as security for their loan. Alternatively, you may have an interest-only loan which you are using as a tax deduction to keep your income in a lower tax bracket. In both of these scenarios, it may be in your best interests to keep your mortgage open rather than paying it off and closing your loan.

Will I be charged extra fees if I pay off my variable home loan sooner?

No – you won’t be charged early exit fees on a variable home loan , although if you do pay off your loan and decide to close it, you may have to pay mortgage discharge fees (which apply any time a mortgage is removed from a Land Title). If you have a fixed rate loan , which you decide to end early, early exit fees are likely to be charged.

Can I take out a home loan for less than 25 years?

Yes – just because the standard home loan term is 25 or 30 years doesn’t mean that you have to take out a loan for this length of time. Before you apply for your loan, use Savvy’s home loan repayment calculator to work out how much you can afford to repay and get an idea of how long you’d like your loan term to be.

Can I extend the term of my loan to reduce my repayments?

Yes – if you're struggling to make your home loan repayments, it's possible to refinance your loan to a longer term to reduce the cost of your instalments. However, it may be worth looking at other options before deciding to increase your loan length if you are suffering temporary mortgage stress. Increasing your loan amount to consolidate other, more expensive debts could be one option to reduce your overall interest payments.