If you’ve been watching the news, you’ll know the Reserve Bank kept the cash rate on hold at 4.35% at its August 2026 meeting — the fourth hold in a row, but Governor Michele Bullock hasn’t ruled out another hike if inflation surprises to the upside. For anyone with a mortgage, that’s the key takeaway: rates aren’t falling any time soon, and every dollar of interest you can avoid paying now is a dollar back in your pocket.
The good news is you don’t need a pay rise or a rate cut to make a real dent in your home loan. A few small, deliberate changes to how you manage your mortgage can shave years off your loan term and save you tens of thousands of dollars in interest. Here’s where to start.
1. Make extra repayments — even small ones
Interest on most Australian home loans is calculated daily on the outstanding balance, which means every extra dollar you pay down reduces the interest charged from that day forward. You don’t need to find thousands of dollars a month to make a difference.
For example, on a $600,000 loan at 6.5% over 30 years, adding just $200 a fortnight in extra repayments can cut close to 5 years off the loan and save well over $80,000 in interest, depending on your rate and loan structure. Even rounding your repayment up to the nearest $100 adds up over time.
Before you start, check your loan for repayment limits — some fixed-rate loans cap additional repayments at $10,000–$30,000 a year, with break costs or fees if you exceed them.
2. Switch to fortnightly repayments
If your loan is set up for monthly repayments, switching to fortnightly can quietly increase how much you pay each year — without it feeling like a bigger commitment. Because there are 26 fortnights in a year (equivalent to 13 months), you end up making one extra month’s repayment annually compared to a straight monthly schedule.
It’s a simple change your lender can usually make in a phone call, and it works in the background while your budget stays roughly the same.
3. Use an offset account properly
An offset account is a transaction account linked to your home loan, where the balance “offsets” the loan amount you’re charged interest on. If you have a $500,000 mortgage and $30,000 sitting in a linked offset account, you only pay interest on $470,000.
The trick is to actually use it: have your salary paid into the offset account and pay everyday expenses from there (ideally on a credit card you pay off in full each month), so your offset balance stays as high as possible for as long as possible. Even without extra repayments, a fully utilised offset account can save tens of thousands in interest over the life of a loan. Our loan calculators can help you see the difference an offset account makes to your own numbers.
4. Review your interest rate — don’t assume loyalty pays
Lenders often price new customers more competitively than existing ones. If you haven’t checked your rate against what’s currently available in the market in the last 12–18 months, there’s a good chance you’re paying more than you need to — even with rates on hold.
A refinance isn’t the only lever here. Sometimes a call to your existing lender asking them to match a competitor’s rate is enough. If they won’t budge, refinancing to a lower rate — even by 0.3–0.5% — can be worth thousands a year on an average-sized loan, though it’s worth weighing that saving against any discharge or establishment fees.
5. Avoid interest-only periods where you can
Interest-only repayments can be useful for cash flow in specific situations — investment properties, short-term hardship, or bridging finance — but on an owner-occupied loan they mean you’re not reducing the principal at all during that period, so the total interest bill over the life of the loan goes up. If you’re on an interest-only arrangement and your circumstances allow it, switching back to principal and interest repayments as soon as possible will get you back on track to paying the loan down.
6. Consolidate high-interest debt into your home loan — carefully
Credit cards and personal loans typically carry much higher interest rates than a mortgage, so rolling that debt into your home loan can reduce the total interest you’re paying each month. The catch is that spreading a $15,000 credit card debt over a 25-year loan term can actually cost you more in interest overall if you don’t also increase your repayments to pay it off in a similar timeframe to the original debt.
Debt consolidation works best when it’s paired with a clear repayment plan, not just a lower minimum monthly cost.
7. Get your loan structure checked by a broker
Loan products change constantly, and what suited you three or five years ago may not be the most efficient structure for your situation today. A mortgage broker can compare your current loan against the market, check whether you’re eligible for a better rate, and make sure features like offset accounts, redraw facilities, and repayment frequency are actually working for you rather than sitting unused.
The bottom line
None of these strategies require a rate cut from the RBA. Extra repayments, an actively used offset account, fortnightly payments, and a loan structure that’s actually reviewed rather than left on autopilot can each make a measurable difference — and together, they compound.
If you’re not sure where your mortgage stands, Click Financial offers a complimentary home loan health check to see whether your current rate and structure are still working for you, with access to over 40 Australian lenders to compare against.