Transfer Money to Home Loan? Unlock Savings Fast (2026)

Are you looking for ways to reduce the interest on your home loan or pay it off sooner? Transferring money to your home loan account could be the strategy you need. Whether it's from a bonus, tax refund, or just savings, directing extra funds towards your home loan can make a significant difference. But how exactly does this process work, and what should you consider before making a transfer? Let's explore the ins and outs of transferring money to your home loan account in 2026.

Understanding Transferring Money to Your Home Loan Account

Transferring money to your home loan account is a method many Australians use to manage their mortgage more effectively. This process involves making additional payments beyond your regular mortgage repayments. These extra payments can reduce the principal balance of your loan, subsequently decreasing the interest you pay over the life of the loan.

There are typically two types of additional payments: lump sum payments and regular extra repayments. A lump sum payment is a one-time deposit, often from a windfall like a bonus or inheritance. Regular extra repayments involve setting up a schedule to pay more than the required amount each month. Both methods can be beneficial, but the right choice depends on your financial situation and loan terms.

Current Rates, Requirements, and Options

As of 2026, interest rates for home loans in Australia range from approximately 6.49% to 12%, depending on the lender, loan type, and your credit profile. When considering transferring money to your home loan, it's essential to understand how these rates apply to your loan and the potential savings.

Before making additional payments, check your loan agreement for any restrictions or fees. Some loans charge a fee for early repayments, especially fixed-rate loans. Variable-rate loans often offer more flexibility, allowing you to make extra payments without penalty. Always consult your lender to understand the specific terms of your mortgage.

Steps to Transfer Money to Your Home Loan Account

Transferring money to your home loan account can be straightforward if you follow these steps:

1. Review Your Loan Agreement: Understand any restrictions or fees associated with additional payments.
2. Contact Your Lender: Confirm the process for making extra payments. This can usually be done via online banking, phone, or visiting a branch.
3. Determine the Amount: Decide how much you can comfortably afford to transfer without compromising your financial stability.
4. Make the Transfer: Use your preferred method to transfer the funds. Ensure you specify that this is an additional payment towards the principal.
5. Monitor Your Loan Balance: Regularly check your loan statements to ensure the extra payments are correctly applied and track your progress.

Tips and Considerations

Here are some expert tips to consider when transferring money to your home loan account:

• Budget Wisely: Ensure that making additional payments will not disrupt your ability to cover other financial obligations.
• Emergency Fund: Maintain a separate emergency fund so that you are not tempted to use your mortgage account as a savings buffer.
• Utilise Offset Accounts: If your loan has an offset account, consider depositing extra funds there. This can reduce the interest charged while keeping your funds accessible.
• Consult with a Mortgage Broker: At Esteb and Co, our team can help you navigate through your options with access to over 83 lenders, ensuring you make the best decision for your financial future.

Frequently Asked Questions

Here are some common questions about transferring money to your home loan account:

• Can I make extra payments on any type of home loan? Most variable-rate loans allow extra payments, but fixed-rate loans may have restrictions or fees.
• How much can I save by making additional payments? The savings depend on your loan balance, interest rate, and the amount of the extra payment. Small regular payments can significantly reduce the loan term and interest paid.
• Is it better to pay off my home loan or invest my money? This depends on your financial goals and risk tolerance. Paying off your home loan can provide guaranteed savings, while investments carry risk but may offer higher returns.
• Will making extra payments affect my credit score? Making extra payments should not negatively affect your credit score. It demonstrates responsible financial behaviour.
• What happens if I need to access the funds I've paid into my home loan? Some loans offer redraw facilities, allowing you to withdraw extra payments if needed. Check with your lender for specifics.