Budgeting, Planning, Interest Saving and Mortgage Management service offered to clients by way of our exclusive Mortgage Minimiser Program.
We complete a full analysis of client situation and personal budget, consider more effectively structuring client’s finance and provide a detailed personalised report of results achievable.

UNDERSTANDING THE STRUCTURE OF A TRADITIONAL MORTGAGE

Owning your own home is the great Australian dream, but the amount of interest you pay to achieve that dream can be quite sizeable.

For instance, do you know that if you are paying 6.5% in home loan interest, your total payments will amount to more than double the original capital borrowed over a 30 year period. In other words, for each $10,000 of borrowing you will repay $22,700 back. For a $150,000 mortgage, you will have to repay a total of $341,000.

Since housing interest for Owner Occupiers is not tax-deductible, home mortgage payments tend to comprise a substantial component of the take-home pay of the average Australian family.

Traditional Bank mortgages are structured in such a way that in the first 10-15 years of a typical 30 year mortgage, very little capital is paid off principal. This is because in the early stages of the loan, the balance is at its highest causing a greater amount of interest to accrue and charge.

The Mortgage Minimiser Program will take its place in financial markets as being a sound and innovative method of paying off your home as well as freeing up your equity for further investment opportunities and potential growth .

The Mortgage Minimiser Program is smarter than traditional methods of accumulating wealth as the plan works without the need to increase the amount of income earned or necessarily changing the lifestyle you have grown accustomed to.

MORTGAGE REPAYMENT ALTERNATIVES

There are now four methods available which may be applied to the repayment of a mortgage with a view to reducing the interest cost and paying the loan off earlier.

LUMP SUM REPAYMENT

Though this option reduces the availability of "accessible reserves", any additional payments do have a positive effect on the loan balance the financier calculates interest on being direct off of principal.

MAKE MORE REPAYMENTS

This is a popular method encouraged by many of the Banks. For example, if you are currently making monthly payments of say $1,000, you could increase the frequency of the repayments to $500 per fortnight, which would mean that over the course of a year you would actually pay 26 fortnightly payments of $500, totaling $13,000 (versus $12,000 at the at the previous monthly rate).

OFF-SET ACCOUNT

This plan works on the basis that instead of paying additional amounts off your mortgage (which would lock the money into your mortgage), funds are placed into what is referred to as an off-set account.

Instead of crediting interest generated by the deposit account, which is taxable, the lending institution effectively credits the interest against the mortgage. This effectively means that more of the monthly payment made goes towards the reduction of the principal of a loan. Also, your money is readily accessible should you need it.
These days some Banks will offer 100% offset, meaning you are paid the same amount of interest on your credit funds as you are charged on the linked loan.

REVOLVING LINE OF CREDIT

A relatively new innovation in consumer borrowing, replacing the normal home loan with a form of personal overdraft. Interest is calculated against the daily outstanding balance and charged monthly. This gives you the maximum benefit of each repayment you make to the account.

It can be advantageous for clients to consolidate other higher interest costing loans into the Line of Credit which can lead to substantial interest savings thus allowing a greater amount for principal reduction. This account is usually an "all in one" account which you are able to pay salary, rent etc. into, and draw from by cheque, ATM and EFTPOS. This product has previously been available only to the professional market (i.e. Doctors, Solicitors etc.).

The following summarises the features and benefits of this product:

Interest only - The minimum payment due for these facilities is interest only. All additional repayments are at your option, with any payments above the interest directly reducing the outstanding balance, therefore reducing the total interest payable.
Access to funds - All principal repayments remain accessible should an emergency or an opportunity arise i.e. complete flexibility to “redraw” as needed.
No further loan applications - Generally once the limit is in place you have proven you are creditworthy and need not ever apply for a loan again. In short, you control you finances not the Bank.
Borrow for any purpose - The purpose of the withdrawal is unquestioned by the bank both at the outset and during the life of the facility.
Transferable - Should you decide to upgrade your home, the facility is simply transferred to the new property.
Debt consolidation - Other high interest debts such as credit cards and personal loans can be consolidated. This will mean an overall lower interest rate, reducing your commitments and increasing your cash flow, which can be redirected to further reduce your mortgage.