1. Repay your loan at the rate you were assessed at

Your lender approved you at about 3% above the rate you actually got.

If your actual rate is 6.20%, your assessment rate was 9.20%. You passed that test. That's what approval means. So what happens if you continue making repayments at the rate your lender used to assess you?

A 30-year loan is gone in 16.2 years.

It doesn't matter whether you're borrowing $1.425m in Sydney or $475k in regional South Australia. The result is the same because this is a ratio, so the loan size cancels itself out.

2. You don't have to do it for sixteen years

If committing to the higher repayment for sixteen years doesn't appeal to you, you can use the same idea for just twelve months. Make the assessed-rate repayment for one year, then return to the minimum repayment.

12 months of higher repayments can give you:

• 23 months off the back end of the loan

• About $108,000 less interest

The point isn't that everyone should permanently live as though their mortgage payment is 50% higher. It is that even a short period of higher repayments can make a meaningful difference to a long-term loan.

3. When rates fall, don't reduce your repayment

When your interest rate falls, your lender will usually reduce your minimum repayment as well.

If you allow your repayment to fall with the rate, you stay on track for the original 30-year loan. If you keep making the same repayment, you can shorten the loan without increasing the amount you're paying each month.

Here's what that can look like:

Hold through 0.50% → 26.3 years

Hold through 1.00% → 23.8 years

Hold through 2.00% → 20.2 years

It costs nothing to maintain the higher repayment because you were already making it before the rate fell. However, the best-case result from this strategy alone is about nineteen years.

4. Use your offset properly

Money sitting in your offset is already working because it reduces the amount of your loan that interest is calculated on. The more money you can keep there, the greater the potential benefit.

Under these assumptions:

$10,000 in offset → $3,623 saved over five years

$30,000 → 2.2 years off the loan

$50,000 → 3.4 years off

The other advantage is that the money remains accessible. You aren't locking it away, and you can still use it if you need it.

5. Bank the pay rise before you feel it

Your expenses are already based on what you earn today. That means a pay rise gives you an opportunity to increase your loan repayment before your lifestyle expands to absorb the extra income.

If you increase your repayment as your income increases, the effect compounds over time.

+2% a year on the repayment → 20.6 years

+3% → 18.4 years

+5% → 15.5 years

At 5%, you can get to fifteen and a half years without finding a completely new source of money. You're simply directing some of your future income towards the loan before you get used to spending it.

6. Be careful about the assets you expect to pay off the loan

Another strategy is to build assets outside the mortgage, eventually sell them and use the proceeds to reduce the home loan. Off-the-plan Melbourne apartments with a kickback in the price can behave like a new car. You can be behind the day you settle if the real market value is lower than the price you paid.

If your plan depends on selling the asset in ten years, the asset needs to be worth something meaningful in ten years. That means you need to think about the underlying investment, not just the strategy you're using to pay down the mortgage.

7. Stack the strategies

You can make higher repayments while you're earning more, keep those repayments high when rates fall, use your offset effectively, increase repayments as your income grows and build assets outside the mortgage. When you stack them together, the numbers start to change significantly.

That's how a 30-year loan can become a sixteen-year loan under these assumptions.

8. But should you actually pay it off that quickly?

This is where the conversation gets more interesting.

I'm buying assets in my twenties, thirties and forties and letting them compound. I take what they give back and point it at the home loan. Then I use the equity that creates to buy the next one.

The loan still dies. It just dies as a by-product.

Every year you spend killing a 6.20% debt is a year you're not acquiring. For some people, that's exactly right. For others, it could be the most expensive decision they'll ever make quietly.