Reducing the interest paid: payment frequency, extra payments, lump sums, offset accounts and rate changes

What this note covers

1. The one idea behind every strategy
2. Increasing the value of the payments
3. Increasing the frequency of payments — and the trap inside it
4. Paying a lump sum off the principal, and offset accounts
5. Changing interest rates, and reducing the term directly
6. Comparing strategies fairly, and judging reasonableness
7. How this topic is examined in the SACE Stage 2 paper, and what separates a top answer

7 sections · 12 key terms & formulas · 6 common mistakes