7 Ways to Reduce Your Mortgage Payments Before Rates Rise
Published: January 23, 2026
Reading Time: 5 minutes
Location Focus: National
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With interest rates expected to rise in February 2026, now is the time to explore strategies to reduce your mortgage payments. Whether you're looking to lower your repayments or prepare for higher rates, these seven strategies can help you optimize your mortgage.
1. Refinance to a Lower Rate
If you've been with your current lender for several years, you're likely paying a higher rate than new customers receive. Refinancing to a more competitive lender can reduce your repayments immediately.
A mortgage broker can compare rates across multiple lenders and calculate your break-even point. In many cases, the savings justify any refinancing costs. The average borrower can save $100-300 per month by refinancing to a better rate.
2. Switch From Monthly to Fortnightly Repayments
Changing your repayment frequency from monthly to fortnightly can significantly reduce your interest costs. This works because you make 26 fortnightly payments per year instead of 12 monthly payments, effectively making one extra monthly payment annually.
Over a 30-year mortgage, this strategy can save tens of thousands in interest. The best part is that it costs nothing and requires just a conversation with your lender.
3. Increase Your Repayment Frequency
Even if you don't switch to fortnightly repayments, increasing your repayment frequency can help. Some lenders allow weekly repayments, which further reduces interest costs.
The key is that more frequent repayments reduce the average balance on your loan, which reduces the interest you pay.
4. Make Lump Sum Payments
If you have savings available, making lump sum payments toward your mortgage principal can reduce your loan balance and interest costs. Many lenders allow annual lump sum payments without penalty.
Even a $2,000 to $5,000 lump sum payment now can save thousands in interest over your loan's life. If you have a bonus, tax refund, or other windfall, consider putting it toward your mortgage.
5. Reduce Your Loan Term
If you can afford higher repayments, reducing your loan term from 30 years to 25 or 20 years can save substantial interest. For example, reducing a 30-year mortgage to 25 years increases your monthly repayment by approximately 10% but saves approximately 30% in total interest.
A mortgage broker can calculate the exact impact on your repayments and help you determine if shortening your loan term is feasible for your budget.
6. Lock in a Fixed Rate
If you're on a variable rate, locking in a fixed rate before rates rise protects you from future increases. While fixed rates are typically slightly higher than current variable rates, they provide certainty about your repayments.
If rates rise significantly after you lock in a fixed rate, you'll be grateful for the certainty. If rates fall, you might regret the decision, but you'll have the peace of mind of knowing your repayment won't increase.
7. Restructure Your Loan
Restructuring your loan can optimize your repayments and interest costs. Options include splitting your loan between fixed and variable portions, creating multiple loan accounts with different features, or restructuring to better align with your income and spending patterns.
A mortgage broker can help you explore restructuring options and recommend a structure that optimizes your situation.
Taking Action
If you're concerned about rising interest rates, don't wait. The window before February's expected rate increase is narrow. By acting now, you can lock in better rates, restructure your loan, or make strategic payments to reduce your mortgage costs.
Contact a mortgage broker today to explore these strategies. A broker can assess your situation, calculate the impact of different approaches, and help you choose the strategy that works best for your circumstances.
Ready to reduce your mortgage payments? Call Frontier Finance at 0413 798 731. Our brokers will review your mortgage and recommend strategies to reduce your payments before rates rise.
Disclaimer: This article provides general information about mortgage reduction strategies. Specific recommendations depend on your individual circumstances, including your current loan terms, financial situation, and goals. Please consult with a qualified mortgage broker or financial advisor to discuss which strategies are appropriate for your specific situation.