Home Loan Top-Ups? Unlock Savings Fast (2026)

For many Australians, owning a home is one of the most significant financial commitments they will ever make. As life circumstances change, you might find yourself with some extra cash and wonder if you can add this to your home loan. Whether you're looking to pay off your mortgage faster or manage your finances better, understanding how to effectively add extra money to your home loan can be a game-changer.

Understanding Adding Extra Money to a Home Loan

Adding extra money to your home loan, often referred to as making additional repayments, can significantly impact your mortgage in a positive way. This process involves paying more than your scheduled repayment amount, which can reduce the principal balance of your loan faster. By doing so, you can save on interest costs and potentially shorten the life of your loan.

For example, if you have a $500,000 loan with a 30-year term at an interest rate of 6.49%, your monthly repayment would be approximately $3,154. If you were to add an extra $200 each month, you could save over $50,000 in interest and pay off your mortgage nearly 4 years earlier.

Current Interest Rates and Options

As of 2026, interest rates in Australia for home loans are typically ranging from 6.49% to 12%, depending on the lender, loan type, and the borrower's credit profile. Given the volatility in the market, it's crucial to shop around and compare rates. Esteb and Co, with access to over 83 lenders, can help you find competitive rates suited to your needs.

There are generally two types of home loans when it comes to making extra repayments:

Steps to Add Extra Money to Your Home Loan

Adding extra money to your home loan doesn't have to be complicated. Here's how you can do it:

1. Review Your Loan Agreement: Understand the terms of your home loan regarding extra repayments. Some fixed-rate loans may limit the amount you can repay extra each year.
2. Budget for Extra Repayments: Assess your financial situation and determine how much extra you can afford to contribute each month or year.
3. Set Up Automatic Payments: If possible, set up an automatic transfer for your extra repayments to ensure consistency.
4. Track Your Progress: Keep an eye on your home loan balance. Many lenders provide online tools to help you see the impact of your extra repayments.
5. Consult with Your Broker: At Esteb and Co, our brokers can help you understand the best options available from our panel of 83+ lenders.

Tips and Considerations

• Emergency Fund: Before making extra repayments, ensure you have an emergency fund in place to cover unexpected expenses.
• Offset Accounts: Consider using an offset account, which can reduce the interest you pay on your loan while still giving you access to your funds.
• Check for Fees: Some lenders may charge fees for additional repayments, especially on fixed-rate loans. Be sure to check these details.
• Review Regularly: Regularly review your financial situation and loan terms. As market conditions change, refinancing might be beneficial.

Frequently Asked Questions

• Can I make extra repayments on a fixed-rate loan? Yes, but there might be a limit on how much extra you can repay annually without incurring penalties.
• Will making extra repayments affect my ability to redraw? It depends on your loan terms. Some loans allow redraw of extra repayments, while others do not.
• How can I ensure that my extra payments reduce my loan term? Specify with your lender that your extra payments should go towards reducing the principal.
• Is refinancing a good option if I want to make extra repayments? Refinancing can be beneficial if it allows for more flexible repayment options or reduced fees.
• How does an offset account work? An offset account is a transaction account linked to your home loan. The balance reduces the interest payable on your loan.
• Are there any tax implications for making extra repayments? Generally, there are no tax implications for making extra repayments on a residential home loan.
• How often should I review my mortgage terms? It's advisable to review your mortgage terms annually or when there are significant changes in interest rates.