Four ways you can get ahead on your home loan​



As property prices fall and interest rates rise, there are many strategies borrowers can use to ensure they are managing and making the most of changing conditions. Here are four ways you can navigate the current environment and set yourself up for long-term success.



When it comes to property, take a long-term view

Home ownership has long been woven into the aspirations and life goals of Australians, and when we take a look at history, it’s clear why. A home is a central part of lifting and defining your lifestyle, and as an asset, it’s a key component of household wealth nationwide.

Another important part of history to understand is that the Australian property market fluctuates, meaning part of home ownership involves accepting that there will be changes in a property’s value over time. Right now, property prices are dropping, particularly in cities such as Sydney and Melbourne.1

“This is where a long-term mindset is critical. As a borrower, you’re likely to experience the highs and lows of the Australian property market, so it makes sense to both prepare your mindset and your home loan for the long run,” says Carrie Fox, Head of Home Lending at Macquarie Bank.

By this logic, borrowers should consider whether short-term incentives suit long-term goals and strategies.

For example, honeymoon or introductory interest rates are often only valid for a capped time period, meaning the benefit of a reduced rate may be short-lived and the ability to refinance may not be a given in a changing market. Considering the comparison rate (not just the headline rate) is also important, as this is a better reflection of costs over the life of the loan.

Keeping your savings and everyday funds in an offset account can help you save the amount of interest you pay over time - without having to make additional repayments. You can calculate how much you could save with an offset, using our Offset Calculator.




Know your financial position to stay in the driver’s seat

No matter what your life stage or goals, there are always a range of strategies and tools at your fingertips. The starting point for knowing which strategies are best for you is knowing your financial position. That clarity puts you firmly in the driver’s seat and helps you feel in control.

“Making smart choices about your financial future starts with understanding your financial reality – from there, you can leverage a range of tried-and-tested strategies to help you get ahead,” says Fox.

Getting to know your banking set-up is especially important, particularly for your home loan. When you get into the rhythm of regular payments, your home loan can understandably become a ‘set and forget’ - but as conditions change, it becomes even more important to know whether you’re using its features to your advantage.

You could ask yourself: do I have savings that could sit in an offset? Do I have multiple bank accounts holding my savings, and is that both cost-effective and working my money as hard as it can?

Importantly, and in anticipation of potential further rate rises, you could consider if you are in a position to make regular, additional repayments against your home loan. By reducing the principal amount you owe, you both can reduce the amount of interest you pay, and potentially pay off your loan faster. You can see how much you could save using this strategy with our Extra Repayments Calculator.




Stay flexible so you can adapt to change effectively

When you buy into a market that is known to have highs and lows, it makes sense to have flexibility in attitude and strategy, to ensure you are taking advantage of the right tools at the right time.

There are a number of ways you can structure your home loan, to both suit your goals and to navigate through changing conditions. In a rising rate environment, you might choose to fix a portion of your loan, if increased certainty is a priority for you.

Alternatively, if paying off your home loan as quickly as possible is a priority, a variable rate option – which may have no limits on additional repayments – may be more suitable.

It’s important to remember that being flexible in a changing environment shouldn’t venture into reactive, short-term thinking. Being flexible in this context should mean using the strategies and tools available to you at the appropriate time, that support –  not distract from – your long-term goals.

Making smart choices about your financial future starts with understanding your financial reality.


Carrie Fox

Head of Home Lending, Macquarie Bank




Set manageable goals and stick to them

Most people would be aware of how setting a budget and having some guard rails to how you manage your everyday finances can help you save and pay off your home loan faster. Taking the next step into action isn’t the great leap it may sound like.

In fact, strategies that can pay off in the long-term are often simple adjustments to your day-to-day which, over time, form a consistent pattern. Knowing and deciding on what is manageable and effective for your circumstances is key. Things to consider include:

  • Be fee conscious: It goes without saying that fees add up over time. If you have multiple bank accounts, you could ask yourself if the benefit you are receiving from holding those accounts outweighs the fees you are paying for them. If not, it may be worth considering consolidating, and structuring your banking in a way that makes your money work harder for you.
  • Use digital tools: These are typically designed to fit into your day-to-day, making your banking and financial position accessible and manageable for you 24/7. For example, Macquarie’s online banking allows you to create and track budgets, categorise your transactions, and search your transactions using everyday language.
  • Use your benefits: When you’re thinking about effective saving, it makes sense to also consider effective spending. Reducing your spending is one way to save, and you may have strategic ways to do this at your fingertips. For example, Macquarie Marketplace gives Macquarie account holders access to discounts at over 50 retailers, including supermarkets, fashion and furniture stores.

Take the first step

With a range of options, tools and products that can help you manage and get ahead on your home loan, it can feel overwhelming to get started. At Macquarie, we see this variety as a positive for borrowers – you can choose what best suits you and your lifestyle, as you work towards the goal and achievement of owning your own home.



Key takeaways

  • Property is typically a long-term investment, so it makes sense to stick to a long-term mindset when you structure and consider your home loan.
  • When you know your financial position, you know your options. Being clear on where you stand is key to managing your finances, including your home loan.
  • Markets and conditions change over time, being flexible – without compromising your long-term strategy – can help you use the right tools, at the right time.
  • Sticking to your goals is as important as setting them. Create and consider manageable strategies and behaviours that form a consistent pattern over time in how you manage your finances.  

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This article has been prepared by Macquarie Bank Limited ABN 46 008 583 542 AFSL and Australian Credit Licence 237502 (‘Macquarie’). It doesn’t take into account your objectives, financial situation or needs, nor is it intended as a substitute for any accounting, tax or other professional advice, consultation or service – please consider whether it’s right for you. Nothing in this article shall be construed as a solicitation to buy or sell any financial product, or to engage in or refrain from engaging in any transaction. 

The information is current as at September 2022. No representation or warranty, express or implied, is made regarding future performance. Examples are included for illustrative purposes only. Actual performance may depend on numerous factors, including changes in economic conditions and tax legislation.

Any opinions expressed in this article are subject to change without notice. Macquarie accepts no obligation to correct or update the information or opinions in it. No member of Macquarie accepts any liability whatsoever for any direct, indirect, consequential or other loss arising from any use of such information.