How to get ahead of your home loan

Understanding how your home loan works can help you pay it off faster and save money in the long run. There are two main ways you can get ahead.

1. Change your payments to fortnightly or weekly rather than monthly

First, a note about how your payments are calculated

As a Keystart customer, you'll have chosen to make your repayments weekly, fortnightly or monthly to meet your minimum monthly repayment. We calculate weekly and fortnightly repayments based on your minimum monthly repayment.

Let's look at an example

For a minimum monthly repayment of $1,200, weekly repayments would be $1,200 ÷ 4 = $300. Fortnightly repayments would be $1,200 ÷ 2 = $600. 

Note: other lenders may calculate weekly payments differently (eg, yearly payment ÷ 52).

Switch your frequency

The great thing about switching to fortnightly or weekly payments is that you shouldn’t feel a pinch. Your payments are exactly half or a quarter the size of what they would be if you paid monthly, but you pay them more often. 

You also end up effectively making an extra payment in a year.

By making more frequent loan repayments, you're decreasing the size of your loan more often, lowering the amount of interest charged. The difference might not seem very obvious in the short term but over the course of your loan, you could save thousands of dollars.

If your payments are scheduled on a date that does not suit you,  you may also be able to change this to a more convenient date. A lot of our customers want to make their payments just after their fortnightly payday for example. As long as you meet your minimum monthly repayment amount by the due date each month - you can choose what works for you.

You can change your payments to weekly, fortnightly, or monthly at any time in our app, or get in touch and we can help set that up for you. 

2. Make additional payments or more than your minimum

Consider if you can afford to pay more than the minimum monthly repayment amount on your home loan. Even a small ongoing additional payment can save you thousands in interest and take years off your loan.

Paying more than your minimum repayment amount puts you into what we call an advance position. You can build up your advance position and your equity in your home over time, so you can refinance to another lender sooner.

You can set up once-off or ongoing additional payments, or increase your direct debit payments, at any time in our app.

You can also make payments via BPay whenever you wish. BPay payments can be made to Keystart via online banking. You can view your BPay details in the app or get in touch.

Download our app to see what an impact additional payments and changing frequency can make on your loan, so you can move on with your home loan sooner.

You'll pay off your loan faster

This is the main reason to pay more than your minimum on your home loan. By paying more each payment, you are bringing down the amount you owe. Even if it is only a little bit, over time you are reducing your debt.

You may be aiming to cut a 30-year loan down to 25 or 20 years so you can be debt-free faster. 

Move closer toward refinancing

As you pay off more of your loan, you're also increasing your equity in your home. Once you have enough equity in your home, you may be able to refinance to a new lender. As a transitional lender, we encourage you to refinance when you are in a position to do so.

Download our app using the links on this guide to track your estimated equity based on your loan balance and the value of your property. 

Peace of mind

Meeting your home loan repayments is an obligation you have with your loan provider. Knowing that you are not only meeting these obligations but actually getting ahead can provide great peace of mind.  

You can view how far ahead you are in our app.

With the Keystart app you can easily manage your payments and set up once-off or ongoing additional payments. You can find out how much difference you can make to your loan in the app too.

If you don't have the app, you can contact us to help.