These are three things I did to smash down my home loan

Home loan rates are continuing to tumble, giving you the perfect chance to pay down your mortgage. Here are three things you should do to slash your home loan debt, faster.

Borrowers have been given the golden ticket to wiping down their home loan debts.

The Reserve Bank of Australia’s decision to dish out consecutive rate cuts at its last two meetings signals that our economy needs a serious rev up.

But it is also a win for borrowers working their backsides off to become mortgage-free.

The cash rate now rests at just 1 per cent and many home loan rates are in the “2” per cent range; incredible really.

MORE: RBA rate cut delivers these savings to borrowers

If you’re an owner-occupier and your rate is higher than a “3” you’re simply giving the bank money that should be in your pocket.

I’ve had my existing owner occupier home loan since 2015 and while it doesn’t seem rewarding to tip extra in, it’s a slow burn.

Here are three ways I’ve helped get more than nine months ahead of my scheduled repayments.

Principal and interest

From the get-go I made sure I was paying principal and interest.

It worries me how many Australians living in their own homes have opted to pay interest only.

I’m not a fan of interest only. It effectively means you’ll never own your own four walls.

Often if you’re in this situation you’re relying on capital growth — which has proven a dangerous strategy in some of the nation’s capitals hit by big price falls.

Save yourself costs on your loan by making principal and interest repayments.

If you’re not paying principal and interest, make the switch immediately.

Rates won’t be this low forever so if you’re paying interest-only now you’re going to get a rude shock when you eventually have to start paying the principal down and rates are higher.

Hit up your bank

Banks don’t like to hear from their customers. They want minimal contact.

When they do hear from you, they certainly don’t want you to demand a better deal.

That’s exactly what I do and you should do too.

I’ve lost count of how many times I’ve phoned up my lender and quoted a better interest rate they are offering existing customers.

And to add salt the wound I reel off lenders with cheaper deals other than them.

Do your homework, know what deal you’re on and then seek out a cheaper option.

Ring your existing lender, ask for the home loan retention team and talk tough.

Chances are they’ll drop your rate or waive some fees.

Remember their job is to “retain” you, not lose you.

Never touch your redraw

This is one of the most tempting aspects of your mortgage, allowing you to use it like an ATM.

As you scale ahead on your loan, your redraw grows too.

This is where borrowers can easily pull back funds they have paid ahead to take a holiday, buy a car, renovate the house or goodness knows what else.

I’ve made a rule to only use my redraw as a last resort.

It’s not there to be dipped in and out of because ultimately it’s just slowing me down on paying back my debt.

@sophieelsworth