From 30 Years to 10: The Property Strategy Helping Australians Ditch Their Mortgage Early
Yes, it’s possible – and without making extra repayments.
Many Australians accept the idea of being tied to a 30-year mortgage. But there’s a little-known strategy that could slash that time by two-thirds – without paying a cent more off your loan each month.
A Smarter Approach
Rather than simply relying on offset accounts or extra repayments, you can put your existing home equity to better use. Here’s how:
- Use your equity to purchase a positive cash flow investment property, including upfront costs like stamp duty.
- The property earns rental income (typically $100–$400 per week after expenses).
- Over 7–10 years, it grows in value by an average of 7% per annum.
- You then sell the investment, using the profit to pay off a significant portion – or all – of your home loan.
And the best part? You haven’t made any additional repayments during that time.
Multiply the Impact
If your borrowing capacity allows, investing in more than one property can compound the benefits. This may fast-track your ability to pay off your mortgage and potentially grow a property portfolio for retirement.
Where to Invest?
Timing and location matter. Property markets move in cycles – typically:
- ~7 years of strong growth (up to 100%)
- Followed by ~7 years of minimal growth, as affordability and rental yields recover
Over the past 12 months, the national housing market continued to rise, with capital cities up 3.4% and regional areas up 4.6%. However, not all markets are equal:
- Sydney grew just 2.5%
- Melbourne saw modest growth of 1.7%
- In contrast, Adelaide surged 10.7%, Perth jumped 8.9%, and Brisbane climbed 7.9%
These results reflect a broader trend: Adelaide, Perth, and Brisbane are in earlier, high-growth phases of their cycle, while Sydney and Melbourne are in flatter, lower-yielding phases.
This divergence creates a compelling opportunity.
Markets like Adelaide, Perth, and Brisbane are expected to outperform Sydney over the next 7–10 years, delivering:
- 60%–100% more capital growth
- 50%–100% higher rental yields
For every $1 million invested, that could mean an additional $800,000 – $1.2 million in combined capital growth and rental income compared to investing in Sydney at this stage of the cycle.
In other words, smart market selection could significantly accelerate your ability to pay off your home loan and build long-term wealth – without spending a cent more on monthly repayments.
Understand and Manage the Risks
This strategy does involve taking on more debt in the short term, so it’s vital to understand and mitigate the risks.
1. Interest Rate Fluctuations
Even positively geared properties can require top-ups if interest rates rise faster than rents. Always budget for rate increases or vacancies.
2. Unrealised Capital Growth
Not all markets deliver equal results. Working with a professional advisor who has access to independent forecasts and data-driven insights reduces the risk of buying in an underperforming area.
You only need ~2% annual capital growth for this strategy to outperform traditional mortgage repayment – and the Australian market has historically grown at 9.8% per annum over 50 years (compounded).
3. Risk Buffering & Protection
We recommend:
- Borrowing additional funds as a financial buffer
- Having income protection and life insurance
- Conducting thorough due diligence using the best research available
The Payoff?
If executed carefully, you can:
- Pay off your home in a fraction of the time
- Build serious equity
- Create a platform for long-term wealth and financial freedom
Case Study – Paying Down the Mortgage with Equity Growth in Adelaide
InSynergy helped this first-time investor execute a clear goal: to pay down their home loan faster and build long-term wealth through property.
By leveraging spare equity in their Northern Beaches home, they secured the deposit and covered upfront costs to purchase a brand new two-bedroom, two-bathroom townhouse with a single car space in a sought-after lifestyle location in Adelaide.
In just three years, the investment property delivered outstanding results:
- Purchased for $390,000, now valued at $585,000 – a 50% increase in value
- Rented to a long-term tenant
- Delivers a 6% rental yield, boosting the client’s cash flow
With $195,000 in equity gained, the client is using this success strategically:
- Some of the equity is being used to pay down their home loan, significantly reducing their mortgage term – all without increasing their monthly repayments.
- The remaining equity will go towards the deposit and costs of their next investment property, helping them build a diversified portfolio for long-term wealth and retirement security and to further pay down their home loan over time.
By taking a smart, measured approach with the right guidance, the client has turned one property into a life-changing financial strategy.
Considering this strategy?
Speak with one of inSynergy’s experienced Property Investment Advisors to explore what’s possible based on your personal financial situation.
