From renting out a room to 'hiding' money from yourself: Finance expert shows how to pay off your home loan in half the time

Many Australians could pay down their mortgage in half the time if they followed three simple steps, according to a leading personal finance expert.

Money coach Max Phelps, the author of Getting Your Money $hit Together, said controlling expenses, finding additional income and more effective planning were the key elements to quickly paying off a home loan.    

Financial guru Max Phelps (pictured above) is regarded as Australia's leading money expert

Getting ahead financially and sticking to a budget are challenges many couples face (stock image)

Paying off a home loan is the primary goal for millions of hard working Australians (stock image)

'For countless Australians, paying off their mortgage is currently their largest financial goal,' Phelps told Daily Mail Australia.

'Plenty of people find this hard to believe, but it is definitely possible for most people to pay it down in half the time.

'The best and only way is to pay more than the minimum repayment.'

CONTROLLING YOUR EXPENSES

Phelps laid out a key element of his strategy in the Five 2 Money Diet, under which people use five bank accounts across two banks.

Under that plan, Phelps said those with a mortgage should treat their home loan repayments as a bill and pay them out of a separate bank account that has no card access. 

This ensures the money in the account can not be frittered away on other expenses.

'About 90 per cent of people in the Western world aren't great with money. Thanks to credit and debit cards, we live in a world of infinite money - the key is to 'hide' money from yourself. 

'You will be better off in the long term.' 

FINDING AN ADDITIONAL INCOME

During a recession this is easier said than done, particularly for those who are time poor or have children. 

However Phelps said there were some options that required no extra time commitment, such as renting out a spare room, housing international students or asking for a pay rise at work. 

'Sometimes these tough conversations can make a huge difference in the long run,' Phelps said. 'Find what works for you.' 

EFFECTIVE PLANNING

'Sacrifices are vital to achieving your financial goals,' the former high school maths teacher said. 

'I can't stress this enough, know your numbers and stick to a budget.' 

Phelps added the key steps to financial success and security are always to borrow within safe limits, maximise income, control expenses and put around half your income towards paying off your home loan.