One simple strategy could shave years off your home loan, saving you thousands of dollars in interest along the way

With interest rates and the cost of living on the rise, homeowners have been looking at all manner of ways to make the household budget stretch a little further .

But there’s one easy thing borrowers can do now that will save them a small fortune over the long run. And it’s possible your lender may not have even mentioned it.

Increase your repayment frequency

Simply by paying your monthly home loan premium in fortnightly instalments could wipe between 4 and 5 years off the term of your loan. It’s simply because, in effect, you get a whole month’s extra payment per year. Instead of 12 monthly payments, you’re making 26 fortnightly payments.

Since lenders calculate interest daily, based on the outstanding balance of your loan, over time, the savings really mount up. Let’s crunch some hypothetical numbers: