The benefits of aggressive home loan repayment

There's no question that when it comes to financial commitments, taking out a home loan is one of the largest many Australians will take on board in their lives, especially if it's their first home loan.

Having a mortgage is somewhat bittersweet – you own your own property, but you have to continually pay each month for the privilege.

However, it is important to remember that home loan repayments aren't simply a static concept. There is an opportunity here to get aggressive with your repayments and potentially knock years off your repayments. Plus, you could save heaps on interest!

Interest on your home loan is calculated daily, and it doesn't take a mathematician to understand that by paying more towards your monthly repayments than normal, you'll pay less interest overall.

Even increasing your repayment amount by a tiny amount could end up saving you big in the end.

Furthermore, getting proactive with your loan repayments has the added bonus of helping to grow your equity. Remember, making more repayments isn't just good for reducing your interest – you'll also be paying off the loan principal faster.

Your equity is the difference between the value of your home and what you have left to pay off.

This means that your home equity will grow faster, which could help you with any big renovation plans in the future.

But the most obvious reason for upping the ante with your home loan repayments is that you'll be debt-free faster!

The freedom you'll experience when you finally own your home freehold will give you peace of mind, knowing that all your debts have been settled, leaving you with room to spend your money elsewhere – perhaps on more property!