Can I make extra repayments on a fixed rate home loan?

Most fixed rate home loans in Australia allow limited extra repayments — typically $10,000–$30,000 per year without penalty. Exceeding this limit can trigger break costs. Variable rate loans generally allow unlimited extra repayments at no charge. If making extra repayments is a priority, a variable rate or split loan is usually more suitable.

Is it better to make extra repayments or put money in an offset account?

Both reduce the interest you pay on your loan — every dollar in an offset account reduces the principal on which interest is calculated, exactly like an extra repayment. The key difference is access: offset funds remain accessible for emergencies; extra repayments into the loan are harder to access (via redraw, which some lenders restrict). For most borrowers, an offset account is preferable because it provides the same interest saving with full liquidity.

Free Calculator

Extra Repayment Calculator

See how much time and interest you save by adding extra repayments to your home loan. Even small extra payments can save years off your mortgage and tens of thousands in interest.

How much do extra repayments save on a home loan?

An extra $500/month on a $500,000 loan at 5.5% over 30 years saves approximately $120,000 in total interest and cuts around 8 years off the loan. Even $200/month extra saves over $60,000 and removes about 4 years. The key insight: extra repayments made in the first 10 years of a loan save proportionally much more than the same repayments made later.

•Extra $100/month on $500k loan: saves ~$32,000 in interest, cuts ~2.5 years
•Extra $300/month on $500k loan: saves ~$80,000 in interest, cuts ~5.5 years
•Extra $500/month on $500k loan: saves ~$120,000 in interest, cuts ~8 years
•An offset account achieves the same interest saving with full access to your funds

Ask about offset accounts and redraw facilities

Extra Repayment Calculator

See how extra payments can save you money and time

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Enter your loan details to see how extra payments can help

This calculator provides estimates only. Check with your lender about any limits on extra repayments, especially for fixed-rate loans which may have restrictions.

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Make Sure Your Loan Allows Extra Repayments

Some fixed rate loans cap extra repayments. A broker can check your current loan features and, if needed, find a more flexible product — without affecting your rate if you refinance at the right time.