If I was 25 again I would…

…pay extra off my mortgage.

If I could find just $100 extra per month – less than the proverbial cup of coffee every day – and added this to my repayments on a $300,000 mortgage with an interest rate of 3.75% per annum over a term of 25 years, I would save $17,466 in interest, and shave more than two years off the term of the loan.

If I couldn’t make the extra payments regularly I’d aim to use any windfalls to pay down the loan. An additional $1,000 paid at the start of the same mortgage would save me $19,795 in interest over the term!

In practice, the easy way to do this is through a mortgage offset account. This would ensure all my savings, including the extra amounts I can find here and there, are working to reduce my total interest bill. And if interest rates rise, the savings will be magnified.