What to do before your final home loan repayment.

Congratulations! You’re ‘this close’ to paying off your home loan. So the question may arise: now what? Consider the below steps before your final home loan repayment.

Weigh up your options.

Check whether you have other debts with higher interest rates or repayments. Typically, a home loan is one of the lowest interest rate debts available, so it makes sense to pay off any credit card debts, personal loans or car loans first.

Check your home loan insurance.

Once you have paid off your home loan, you should complete a financial health check. This should include reviewing and updating your insurance. You need to have a realistic idea of what your home and contents are worth. This is likely to change significantly over your years of homeownership.

In the face of loss or damage to your home contents, if you don’t have the funds available to replace or rebuild, it could mean a major financial setback.

Defence Bank’s home and contents insurance can be tailored to fit your needs, and provides cover for loss or damage to your buildings or contents as a result of incidents such as theft, fire, vandalism, and others.

Revise your title.

When you have a home loan, the bank holds the Certificate of Title until the loan has been repaid. At that point, you need to remove the lender from your title. Also, when you’re close to paying off your home loan, you need to discharge your loan. If it’s not done properly, it can impact your ability to sell your property quickly and efficiently.

Here’s how it’s done:

  1. Contact Australia’s Defence Bank. We’ll ask you to complete a mortgage discharge authority form.
  2. Complete the mortgage discharge authority form. Whether your loan is already paid out or about to be paid out, we will process this form within two business days. Please note: the receipt of discharge registration can take six to eight weeks to receive, so think ahead if you need a quick sale or to refinance.
  3. We can assist with registering your discharge and Certificate of Title. Once we have received and processed a mortgage discharge authority form, the registration of discharge is handled by our team of solicitors.

Review your estate plan and will.

Having a will should always be a priority, but this becomes even more critical when you have paid off your home loan. Not having a will can cause unnecessary complexities for family/friends on one’s passing, so it is important to have this taken care of. Working with a financial planner can make the process of putting your will together easier.

It’s also important to review your will and estate plan regularly, and to update it if significant life events change your intentions regarding your estate. These could include real estate purchases, marriage or divorce, the death of one of your beneficiaries, or the birth of a potential new one. Developing an estate plan can help you protect and arrange the transfer of jointly held assets, trust assets, and superannuation benefits. These types of assets are not dealt with in a will. For example, your superannuation benefits can be distributed at the discretion of the superannuation trustee. You can put in place ‘death benefit nominations’ to ensure super benefits go to the people or organisations of your choosing.

Paying off your home loan is an amazing achievement – make sure you make it over the final hurdles easily.

Planning for the future.

It is important to remember that once you have paid off your home loan, you will still need to budget for:

  • Council rates and taxes.
  • Home and contents insurance.
  • Utilities such as electricity, water and gas.
  • General maintenance, repair and upkeep.
  • Upkeep and operations of any unique or special facilities such as swimming pools, spas, saunas, rainwater harvesting systems, large gardens or lawns.

On a positive, not having to make home loan repayments will increase your disposable income and allow you to look into:

  • Travel and hobbies.
  • Building up your emergency fund.
  • Reducing your working hours, or starting your own business.
  • Home renovations.
  • Investing more into shares (or an investment property ).
  • Saving for something you may have been putting off - maybe that new car?

Any questions?

You can count on one of our team members to help answer your queries. Call our Contact Centre on 1800 033 139, or visit your local branch to find out more.

Got questions? We have the answers. See our FAQs.


Important note: This information is of a general nature and is not intended to be relied on by you as advice in any particular matter. You should contact us at Defence Bank to discuss how this information may apply to your circumstances.

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