Purchasing a home is one of the most significant financial decisions a person can make. You may be paying down the loan debt for decades, and the total expense might be intimidating.

Homebuyers are looking for means to save money on their mortgage payments amid rising interest rates, especially since the numbers can increase further. 

Thankfully, there are various methods to save money on your house loan when you apply for one and pay it off. 

Take a look at these seven home loan saving strategies: 

1. Pay Off the Debt as Soon as Possible

Structure your loan instalments as principal and interest, so you begin by paying down the principal. The longer the loan term, the greater interest you will pay over time. 

Putting money aside for your mortgage will lower your interest payments. As such, thousands, if not tens of thousands, of dollars will be saved on interest payments.

2. Use an Offset Account for Your Savings

An offset account is a simple solution to minimise the interest you pay on your home loan. It functions similarly to a transactional savings account tied to your house loan amount. Any money in this account is applied to your loan balance, lowering the interest you pay.

With these interest savings, you may have additional money to spend towards your house loan through extra repayments. You might also use the funds to make other investments or purchases. 

3. Mortgage Refinancing

Refinancing may be an option worth considering if you're struggling to make your mortgage payments. Refinancing at lower interest rates could lessen your monthly payments and save money in the long run. 

However, remember there are fees associated with refinancing. So, it's essential to do the maths before making any decisions. 

4. Loan Modification or Forbearance Agreement

If you're facing financial hardship, reaching out to your lender about a loan modification or forbearance agreement may be a good idea.

These agreements can temporarily lower or suspend your mortgage payments until you're back on solid ground financially. However, understand all the terms and conditions involved, so you don't end up in more debt. 

5. Try Debt Consolidation Options

High mortgage rates can be a real burden on your finances. If you're struggling to make payments, you may want to consider debt consolidation.

Debt consolidation combines all of your current debts into a single loan with a lower interest rate. This saves money on interest and makes it easier to manage your monthly payments.

Before you decide on a debt consolidation plan, you must compare your options and ensure you understand the risks. 

6. Make Use of Lending Packages

Loan packages aren't for everyone, but they might be an excellent way to save money when applying for a house loan for the first time.

Lenders frequently provide packages that include lower rates, insurance, credit cards, access to a financial adviser and other benefits. You will pay a single yearly fee and can borrow at a slightly lower interest rate.

However, if circumstances are such that you do not require the additional functionality, then this may not make sense for you. 

7. Consider Downsizing

If you can't afford your mortgage payments, it may be time to consider downsizing to a more inexpensive home.

It's not an easy decision to make. Remember that significant fees are associated with selling, relocating and purchasing another house. So, examine the current real estate market circumstances and then do the numbers.


A mortgage is a major financial obligation, so you must be prepared to make the payments. However, circumstances can change, and you may be unable to make your mortgage payments. Use this guide to help you save money on mortgage payments.

Count on Wealthy You as we are one of the most reputable alternative finance firms in Sydney. When it comes to finding mortgage options, such as alternative mortgage funding, we are the best mortgage brokers for you. Get in touch with us today!