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Extra repayments are one of the most effective ways to save on your mortgage. Because interest is calculated daily on the outstanding balance, every extra dollar immediately reduces the interest charged the next day. Over time, this compounds into massive savings.Key example: $20
Both achieve the same interest savings. Offset gives you instant access to the money; extra repayments require redraw (which may have restrictions). If you might need the money back, use offset. If you want to lock in the saving, make extra repayments.
Not on a variable rate loan. Fixed rate loans have contractual caps — exceeding them triggers break costs. Always check your loan contract before making large extra payments on a fixed loan.
Extra repayments provide an effective, tax-free return equal to your interest rate. At 6.22%, that\u2019s a 6.22% return with no market risk. Investments may return more but carry volatility. For most owner-occupiers, the mortgage tends to win until rates are very low.
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