Speaker 1: Good morning, everyone, and welcome back to another episode of
Speaker 1: Sugar Mumma's Fireplay. I am your host's financial planner, Canna Campbell,
Speaker 1: and today I want to waste no time at all
Speaker 1: because we're talking about your mortgage, and we're going to
Speaker 1: talk about seven different ideas for you to apply right
Speaker 1: now today for your mortgage so that you can save
Speaker 1: valuable time and money. And I'm not talking about small
Speaker 1: dollars here or silly amounts of time. I'm talking tens,
Speaker 1: if not maybe hundreds of thousands of dollars and shaving
Speaker 1: years off your home loan. This is something I'm really
Speaker 1: serious about you understanding how your mortgage works and the
Speaker 1: things that you can actually do that are really not
Speaker 1: that hard to save you so much time and money.
Speaker 1: And of course, the moment that mortgage is paid off, woohoo,
Speaker 1: there are so many other tools that we can start
Speaker 1: playing with to build wealth outside of your home. Of course,
Speaker 1: now to help us break down all these ideas, these
Speaker 1: very powerful ideas, these practical ideas, these simple ideas, I
Speaker 1: am joined by John Micklzzi from blue Land and Financial Services.
Speaker 1: As you know, we've previously had Adam McCabe in the
Speaker 1: studio plenty of and I decided to mix things up because
Speaker 1: Blue Lantern is actually who I recommend for mortgage brokers.
Speaker 1: I get zero benefit from doing this. I'm just happy
Speaker 1: to share contacts of people that I know and trust,
Speaker 1: but more importantly, people that I have worked with for
Speaker 1: tens of years and actually do my own personal mortgage
Speaker 1: broking and investment loans, as well as my family members
Speaker 1: and all of my friends. So if at any time
Speaker 1: you think you know what, I need to speak to
Speaker 1: these guys. They sound really good. They are, and of
Speaker 1: course I will link all the contact details in the
Speaker 1: podcast notes so you can quickly and easily connect with
Speaker 1: them whenever you feel ready. Now a quick reminder, of course,
Speaker 1: all of these podcasts are general in nature and for
Speaker 1: educational purposes only. All right, now that we've got that
Speaker 1: important compliance requirement out of the way, let's hit the
Speaker 1: ground running. John, good morning. Thank you for coming into
Speaker 1: the studio and to talk about this. And I'm so
Speaker 1: serious about Australian's realing what they can do with their
Speaker 1: home loans to actually get the monkey off their back.
Speaker 1: Do you agree that we need to be paying more
Speaker 1: attention to our homelands?
Speaker 2: Absolutely? And I could not agree with you more, Kenna.
Speaker 1: We have a great calculator on the sugar Mumba website.
Speaker 1: It's an extra repayment calculator at a combined lumpsung. You
Speaker 1: just simply plug in your details and see what an
Speaker 1: extra fifty dollars per month, plus say an extra thousand
Speaker 1: dollars bonus each year on your homelan doesn't see the
Speaker 1: term drop and see the amount of savings add up.
Speaker 1: And of course that's subject to interest rates remaining the
Speaker 1: same and of course making sure you don't draw that
Speaker 1: money back out again. But you have a choice, and
Speaker 1: you really can actually pay off the whole mortgage so
Speaker 1: much faster. You are not dictated by the bank or
Speaker 1: your lender. But look, let's get cracking because we've got
Speaker 1: seven ideas that we want to break down together as
Speaker 1: to how to pay off your home loan off as
Speaker 1: quickly as possible. Before we begin, I'm just sorry, I
Speaker 1: just don't want to hit the gray money. Can you
Speaker 1: just give everyone the quick introductionist to who you are,
Speaker 1: because obviously everyone's used to hearing Adam on the show.
Speaker 1: Can you explain to everyone what you do and how
Speaker 1: you fit in at Blue Lantern.
Speaker 2: Sure, So there's a few brokers at Lantern. I'm Johnny.
Speaker 3: Let's see on one of the team, and so we
Speaker 3: bread the workout evenly between the team, depending on a speciality,
Speaker 3: depending on who's available, depending on you know, where that
Speaker 3: client has come from. So there's always good coverage for
Speaker 3: anyone that wants to come and have a chat with us,
Speaker 3: do a mortgage health check, get ready for a purchase.
Speaker 3: So briefly, that's my work splits into two. So it's
Speaker 3: either helping people purchase the property, but then importantly staying
Speaker 3: with them after that, you know, working with them through
Speaker 3: the life of the loan to ensure that you know,
Speaker 3: they are trying to minimize interest costs and they are
Speaker 3: getting to total home ownership or at least comfortable levels
Speaker 3: of debt as soon as possible.
Speaker 1: That ongoing service is completely underestimated. And I say that
Speaker 1: because I know how much I rely on Blue Land
Speaker 1: and to review my home loan, to call the bank
Speaker 1: on my behalf and negotiate a better interest rate, you know,
Speaker 1: when it's time to refinance, because the bank won't match
Speaker 1: what they're paying new customers or what the competitive rate is.
Speaker 1: And that guidance as to how to actually structure the
Speaker 1: loans in the right way, because there are lots of
Speaker 1: ways to pay your home loft and lots of different
Speaker 1: ways that suit different people in different situations or different
Speaker 1: periods of their lives. So that ongoing service is actually free,
Speaker 1: isn't it.
Speaker 3: That's exactly right, And I'll go into more detail about
Speaker 3: this later.
Speaker 2: Because of our business model, not all brokes are the same.
Speaker 3: We are compelled, you know, to look after you and
Speaker 3: to give you options and to make sure that everything's
Speaker 3: working well for you. And this is no disrespect to
Speaker 3: banks because obviously we do source funding from banks. We've
Speaker 3: work with them, we work with them, but they are
Speaker 3: not compelled to do anything. They only have to explain
Speaker 3: their products and services.
Speaker 2: That's it.
Speaker 1: Look for anyone who is a mortgage right now, they've
Speaker 1: never had any ongoing relationship in helping power their bank.
Speaker 1: Can this be your sign to pick up the phone
Speaker 1: and find a good quality mortgage broker that's going to
Speaker 1: work with you. And you know, the way I would
Speaker 1: describe what you guys do is you're almost like a coach.
Speaker 1: And look, Adam has always done our home loans and
Speaker 1: investment loans, and I have him on speed dial, and
Speaker 1: it makes it makes the difference because you do make
Speaker 1: greater inroads and you make better progress and you tick
Speaker 1: those goals off. So all right, let's get started. Number one.
Speaker 1: The first thing to do, and when it comes to
Speaker 1: trying to pay for your home loan as quickly as
Speaker 1: possible is to do a budget. But can you explain
Speaker 1: why and how effective this is?
Speaker 3: Certainly, so to try and determine, okay, where could you
Speaker 3: make savings and where can you make inroads? You've got
Speaker 3: to understand what your current expenditure is and try to
Speaker 3: categorize it. To think about categories such as your mortgagey payments.
Speaker 3: Obviously that's the first start, but then things like utilities, rates, insurances, communications, expenditure,
Speaker 3: so those things that you might think, okay, well they're
Speaker 3: sort of fixed in nature. And then there's other categories
Speaker 3: such as groceries, eating out, recreation, entertainment, which are more discretionary, right.
Speaker 1: And't mentalize these expenses exactly, so you can sort of
Speaker 1: focus purely on looking at the utilities expenses, the gas, electricity,
Speaker 1: the water, see what you can't really do too much with.
Speaker 1: And then obviously look at the groceries, alcohol, you know,
Speaker 1: those other inns absolutely which are more volatile or fluctuate.
Speaker 2: Yeah.
Speaker 3: So I have people who say, oh, you know, my
Speaker 3: credit card bill is three thousand dollars a month, so
Speaker 3: that's my expenses. But that's just to have one number.
Speaker 3: It's hard to make inroads into it unless you break
Speaker 3: down that number and see, okay, where can I perhaps
Speaker 3: improve what can't be improved, So.
Speaker 1: You've got to do a deep dive. Yes, I completely agree. Now,
Speaker 1: you and I were chatting on the phone and we
Speaker 1: were talking about this thing called bank statements dot com
Speaker 1: and you've given me example, and I have to say
Speaker 1: it's quite fascinating because it basically is a software system
Speaker 1: that breaks down and does all that. It's almost like
Speaker 1: an AI of budgeting because it breaks down, it compartmentalizes
Speaker 1: everything for you so you don't need to do it yourself.
Speaker 1: So then you can then look at each individual category
Speaker 1: and see what needs to be cut down or cut out.
Speaker 1: Can you explain how you use this to help clients
Speaker 1: and also how does someone get their hands on this,
Speaker 1: because it's extremely helpful.
Speaker 3: So when I do a mortgage, health check, or a
Speaker 3: brief finance or even a purchase. Part of that process
Speaker 3: is understanding living expenses. And then when it comes to
Speaker 3: getting data from people, so for example, credit card statements,
Speaker 3: personal loan statements, home loan statements, we have this service
Speaker 3: whereby it's automated, it's secure, where the statements come directly
Speaker 3: to us. And then importantly with that comes an analysis
Speaker 3: of expenses. Okay, And that's important because someone might say, oh, yeah,
Speaker 3: we spend you know, three hundred dollars on recreation and entertainment.
Speaker 3: Then the data says, well, it's one thousand dollars, right,
Speaker 3: and there's no wrong or right answer. But then it's
Speaker 3: a conversation to say, do you want to limit your
Speaker 3: recreation attainment to three hundred or is it actually one
Speaker 3: thousand dollars a month?
Speaker 2: And you don't want that to change?
Speaker 3: Okay, So that's just a conversations awareness.
Speaker 2: It creates awareness.
Speaker 3: You hear stories in the media about, you know, the
Speaker 3: bank look through my expenses and they questioned why I
Speaker 3: was going to McDonald's every week.
Speaker 2: I don't care. You know, maybe invite me longto McDonald's.
Speaker 2: I don't know. But it's not a deep dive.
Speaker 3: I don't go into what you're spending on where it's
Speaker 3: more the headline numbers. If you want to, if you
Speaker 3: want the data to go in and perhaps look where
Speaker 3: you can improve, fine, I'll give it to you. But
Speaker 3: it's not a deep dive exercise for me into too
Speaker 3: far down. And there's no judgment in the process at all.
Speaker 1: Oh gosh. I mean you and I both know there's
Speaker 1: no judgment where it comes to people's personal finances. You know,
Speaker 1: everyone has their own personal value system, and for us,
Speaker 1: at really the end of the days, we're there to help.
Speaker 1: So if someone comes from saying we need help, we'll
Speaker 1: look at it with a view to help, not to
Speaker 1: of you to judge. And I mean, look, I've got
Speaker 1: an example in front of you right now that you've
Speaker 1: given me, and I have to say it's brilliant because
Speaker 1: immediately my eye went to certain expenses. I was like,
Speaker 1: oh wow, you know you could actually make an extra
Speaker 1: eighty dollars per month for repayment just by looking at
Speaker 1: this one particular expense. It really does break it down.
Speaker 1: So I mean, I'll put for everyone that's listening right now,
Speaker 1: obviously John's contact details, but I believe you're happy to
Speaker 1: give some people access.
Speaker 2: To this as part of a mortgage health check.
Speaker 1: As part of the mortgage health check. So, I mean,
Speaker 1: what a brilliant opportunity for everyone to get a great
Speaker 1: refresh of their budget through this amazing service and get
Speaker 1: some help from you. So all right, Realistically, people think, oh,
Speaker 1: a budget, it's like doing going to the dentist. You
Speaker 1: don't want to do it, you procrastinate. But the smallest savings,
Speaker 1: this particularly a regular basis on a mortgage, can actually
Speaker 1: save you thousands of dollars exactly. Can you give us
Speaker 1: a couple of realistic examples to how much you know,
Speaker 1: some you know, say one hundred and fifty dollars per
Speaker 1: month that you might find from your budget when applied
Speaker 1: to making an extra repayment on your homeland. How much
Speaker 1: really are we talking about? Because I feel like when
Speaker 1: people hear that how much, they'll say they'll want to
Speaker 1: go do their budget immediately. So can you give us
Speaker 1: an example, a realistic example as to how much someone
Speaker 1: can save from a time point of view and from
Speaker 1: an interest point of view by doing their budget and
Speaker 1: fighting say an extra hundred dollars or extra fifty dollars
Speaker 1: or an extra hundred and fifty dollars per month that
Speaker 1: they can apply to their homelan.
Speaker 2: Sure.
Speaker 3: I call it the power of small amounts of money,
Speaker 3: and it shouldn't be sneezed at. So I will do
Speaker 3: it on an annual basis. So that way, maybe that's
Speaker 3: even that's more achievable for someone. If someone puts a
Speaker 3: thousand dollars extra on their home loaner per year, yeah,
Speaker 3: per year, right, that thousand dollars saves five thousand dollars
Speaker 3: in interest.
Speaker 1: Wow, so that's not even one hundred dollars per month,
Speaker 1: that's right. What are we using as an average mortgage
Speaker 1: size here?
Speaker 3: So that's for a five hundred thousand dollars average mortgage size.
Speaker 3: Even up to eight point fifty, the saving is a
Speaker 3: little bit more. But just think in rough terms, one
Speaker 3: thousand dollars on five thousand dollars off in interest.
Speaker 1: That is amazing.
Speaker 2: And what's the average interest rate you're using that I'm
Speaker 2: using six point one five.
Speaker 1: Six point one five, okay, so that's a pretty competitive rate.
Speaker 1: That's computer greedy in these numbers. So essentially it's like
Speaker 1: that one thousand dollars savings gives you back an additional
Speaker 1: four thousand dollars in total, that's.
Speaker 3: Right, and the average time, so think about it takes
Speaker 3: two to three months off your loan.
Speaker 2: Wow.
Speaker 3: Okay, so then again you do that every year, and
Speaker 3: then you're starting to get into not months, but potentially
Speaker 3: years at the end of the mortgage.
Speaker 1: Well if you feel most people are on a thirty
Speaker 1: year mortgage. So if it's shaving two months off each
Speaker 1: time you do this, it adds up very very quickly.
Speaker 1: And also, as I said, like, that's what eight hundred
Speaker 1: and eighty dollars a month extra pay, not even twenty
Speaker 1: dollars a week, that's right. And if that is not
Speaker 1: a bigger motivation to go and do a budget or
Speaker 1: get a health check done by you and get an
Speaker 1: AI program to do your budget, I don't know what
Speaker 1: is all right? Next idea, let's talk about redraw facilities
Speaker 1: and offset accounts. Okay, how do they work? And how
Speaker 1: can I everyone listening right now use that to their
Speaker 1: advantage to save tens of thousand dollars for their homeland.
Speaker 3: Sure, so whether you use a redrawal facility or offset
Speaker 3: it has the same effect that simple.
Speaker 1: Okay, Can we explain the difference for everyone right now
Speaker 1: between the two.
Speaker 3: So that one thousand dollars we're talking about, you can
Speaker 3: pay that off your loan right and then if it
Speaker 3: has a redraw of facility, you can get that back
Speaker 3: if you need it.
Speaker 2: The discipline is not not getting touched. It's not to.
Speaker 3: Touch it, okay, but at least whilst it's in there,
Speaker 3: it's saving you money. So you will literally see if
Speaker 3: you put one thousand dollars in, if your mortgage is
Speaker 3: eight fifty, it will come down to eight forty nine, okay,
Speaker 3: So you will see the difference.
Speaker 1: And you'll low to be charged the interest on the
Speaker 1: eight four nine exactly exactly.
Speaker 2: Cotant part exactly.
Speaker 3: Now, if you put one thousand dollars in an offset account,
Speaker 3: same thing, same effect, So that.
Speaker 1: Since they're almost looking like savings in the offset account,
Speaker 1: that's right, like it literally looks like an online savings account,
Speaker 1: that's right link to all you accounts, but it's actually
Speaker 1: offsetting the interest. So instead of the bank charging you
Speaker 1: interest on eight hundred and fifty thousand, it's charging your
Speaker 1: interests on eight hundred and forty nine exactly, okay, exactly
Speaker 1: out of interest. Which do you prefer?
Speaker 3: I prefer offset accounts? Personal choice just like the flexibility
Speaker 3: of having the money there. And also there are investment
Speaker 3: properties in play, and therefore I don't want to put
Speaker 3: money on the loan because I need the funds, and
Speaker 3: I don't because once you put money on into investment loan,
Speaker 3: you can't redraw it back without affecting your accounting.
Speaker 1: Can you give us an example of, you know, for example,
Speaker 1: emergency money. I tell everybody you need to have emergency money,
Speaker 1: and you need to have the right emergency money. And
Speaker 1: I say to people, you know, if you can keep
Speaker 1: your emergency money in either your offset account or a
Speaker 1: redraw facility, how much does that save people in time
Speaker 1: and money? Using those same examples of say it, I
Speaker 1: think a six to fifty mortgage, or sorry, five hundred
Speaker 1: thousand dollar mortgage, an eight hundred thousand dollars mortgage.
Speaker 2: Okay, So let's use the figure of ten thousand dollars. Okay.
Speaker 3: So let's just say you have been able to save
Speaker 3: ten thousand dollars and that's your emergency funds, yes, okay,
Speaker 3: And let's say you put them in an offset account.
Speaker 2: Okay. So on an eight fifty loan.
Speaker 3: The savings are over the life of the loan, fifty
Speaker 3: one thousand dollars will be paid nine months.
Speaker 1: Earlier, assuming you don't take my emergency money out. Yes,
Speaker 1: that is huge, fifty one thousand dollars. So just in
Speaker 1: our first two tips alone, you know we've saved what
Speaker 1: five thousand dollars by making an extra one thousand dollars
Speaker 1: zero in payments each year yep, and then an extra
Speaker 1: fifty one thousand dollars by using a redraw facility or
Speaker 1: an offset account. Anyone that's listening to this episode right
Speaker 1: now that has emergency money sitting in an online savings
Speaker 1: account that's not connected to your home loan, please consider
Speaker 1: getting some advice, obviously from John or from you know,
Speaker 1: your own mortgage broker, about the best way to structure
Speaker 1: is look into a redraw facility or an offset account.
Speaker 1: And most of these facilities are free. They're part of
Speaker 1: your loan package anyway.
Speaker 3: Some banks charge a package fee. Some banks don't charge
Speaker 3: a package fee at all, but they still give you
Speaker 3: an offset account. Then you can get really creative. Some people,
Speaker 3: rightly or wrongly, they may not have the discipline. They
Speaker 3: may have a certain way of banking, and for those clients,
Speaker 3: if everything else matches up, for them, I suggest a
Speaker 3: lender that has multiple offset accounts, so they can have
Speaker 3: one account for the emergency funds where they don't have
Speaker 3: to touch where it's they don't have to do the
Speaker 3: everyday banking, and then they have other accounts that they
Speaker 3: use for every day banking. And on that basis, that's
Speaker 3: excellent because every dollar in every account every day is
Speaker 3: offsetting against the loan.
Speaker 1: This is a little insight. My preference is actually a
Speaker 1: redraw facility, So our emergency money systs in a redraw facility.
Speaker 1: I actually just checked it this morning and it's slowly
Speaker 1: getting back up there again. But we do have multiple
Speaker 1: offset accounts for our other smaller goals, like we're saving
Speaker 1: up to renovate our kitchen, we are saving up to
Speaker 1: take the kids skiing overseas in June, So we have
Speaker 1: those little smaller accounts bubbling away that are at least
Speaker 1: offsetting the interest on other loans as well. So it
Speaker 1: really is that combination is equally as powerful, but incredibly
Speaker 1: effective and in saving you all the time. And I
Speaker 1: love as a great source of motivation is that when
Speaker 1: we pay our mortgage, I think around the twenty six
Speaker 1: of every month and a couple ofdays later, I'll log
Speaker 1: into my intet banking and look at the interest repayment
Speaker 1: dropping and seeing that we're making a bigger, better progress
Speaker 1: with that deduction.
Speaker 3: Everyone has their own motivation. I think it's important to
Speaker 3: find your own motivation. Everyone has their own personal preferences. Yeah,
Speaker 3: I've used redrawer in the past for different reasons. As again,
Speaker 3: it's just my that's my personal preference, and it's about
Speaker 3: finding what works works for you.
Speaker 1: All right, let's keep these savings bubbling long for our listeners.
Speaker 1: So number three making ad hoc repayments. So you know
Speaker 1: a lot, I know everyone's on a really tape budget.
Speaker 1: They're like, where are we going to come up with
Speaker 1: some extra ad hoc money? Well, you know, taking on
Speaker 1: extra work. Perhaps you might get a tax refund. You know,
Speaker 1: you might do a side hustle, you might declutter your home.
Speaker 1: You know, gosh, my kids stayed to outgrow. They're all
Speaker 1: going through gross spurts. And I've got so many things
Speaker 1: that I could just list onto gum Tree or Facebook marketplace.
Speaker 1: You know, even just an extra like one thousand dollars
Speaker 1: can have an incredible effect. So we just quickly talk
Speaker 1: about the power of ad hoc repayments.
Speaker 3: Yeah, so ad hoc repayments I think, if they can
Speaker 3: be achieved, you know, are excellent because that's where you
Speaker 3: really start eating into your mortgage.
Speaker 2: Right. The savings tips, yeah, they can be done.
Speaker 3: But the extra the ad hoc then again, you know
Speaker 3: we're getting back to that. If you can find a
Speaker 3: thousand dollars savings, and even if you find that extra
Speaker 3: thousand dollars in income or cash or or whatever, again,
Speaker 3: every one thousand dollars is a five thousand dollars saving.
Speaker 1: Wow. Did you know that the average Australian gets back
Speaker 1: about two and a half thousand dollars per annum as
Speaker 1: a tax return.
Speaker 2: No, I was not aware of that.
Speaker 1: So if we were to insteader of put one thousand
Speaker 1: dollars onto the homelan, we put two and a half
Speaker 1: thousand dollars, or even to say, let's say we take
Speaker 1: put two thousand on the home loan and keep five
Speaker 1: hundred for ourselves to keep a bit of you know,
Speaker 1: I guess financial flow in our lives. I mean those
Speaker 1: savings multiply. It's not just doubling it. It actually goes for
Speaker 1: pounds because it's reverse compounding, so that savings is probably
Speaker 1: more like closer to eleven thousand dollars, and you know
Speaker 1: you're saving what probably four or five months off the
Speaker 1: home loan.
Speaker 3: Again, that's exactly right, So just think every thousand dollars,
Speaker 3: think five thousand, and think you know a few months
Speaker 3: off the home loan, home loan.
Speaker 1: One who's listening right now? Can I just do a
Speaker 1: quick shout out to two very powerful calculators. The one
Speaker 1: is obviously on the Sugar Mama website. It is my
Speaker 1: lump Summon extra payment or a calculat where you can
Speaker 1: actually combine the two of increasing your mortgage payments after
Speaker 1: doing a budget and making those extra ad hoc repayments,
Speaker 1: you can see how the combination of the two how
Speaker 1: much time and money they save you. And then of
Speaker 1: course heading over to the Blue Lantern Financial Services website
Speaker 1: because you have a rainbow of calculators that everyone can
Speaker 1: use that actually demonstrate how much more money you can save,
Speaker 1: and they're a really great source of motivation and empowerment
Speaker 1: to really look at realistically paying off your mortgage as
Speaker 1: soon as as possible. But it's not unrealistick to drop
Speaker 1: your mortgage. I think from thirty years down to twenty
Speaker 1: five years if you apply some of these principles we're
Speaker 1: talking right now, would you agree with that?
Speaker 2: Absolutely?
Speaker 1: Yeah? All right. Next one, this is a really important
Speaker 1: one because we all get very lazy and overwhelmed, and
Speaker 1: that is shopping around for a better deal. Why do
Speaker 1: you think we get do this? Like, I mean, I
Speaker 1: just sort of answered the question of myself in my
Speaker 1: personal opinion, But why do we just think assume that
Speaker 1: we're on the best rate.
Speaker 3: I think apherently people want to think pop and they'd
Speaker 3: like to think, yeah, sure, I'm sure that the bank,
Speaker 3: wonderful institution or the lender is looking after me, and
Speaker 3: I'm confident.
Speaker 2: Give loyalty exactly exactly.
Speaker 3: So there's that and two people you know have a
Speaker 3: life and they think that it's boring. They think that
Speaker 3: it's hard work to check in with their finances and
Speaker 3: sometimes also it can be confronting as well. So putting
Speaker 3: all that together, that's why people perhaps don't look at
Speaker 3: it as much as they should. You don't have to
Speaker 3: go crazy, you don't have to look at it every week.
Speaker 3: That might be a bit too much. But I've had
Speaker 3: clients who you can tell that they haven't really focused
Speaker 3: on their finances for good two to three years, and
Speaker 3: that's two to three years of interest that paid overs
Speaker 3: for so and.
Speaker 1: It's funny, it's not until you do it, you know,
Speaker 1: you realize, wow, I should have done this a long
Speaker 1: time ago. I've wasted so much money and time and
Speaker 1: it was really not that hard. And we'll come back
Speaker 1: to that process, all right, shopping around for a better deal.
Speaker 1: Do people really save money when they do this? You know,
Speaker 1: is the time and the effort really worth it.
Speaker 3: I think the first thing to do is do your
Speaker 3: own mortgage health check and go to your existing lender
Speaker 3: and see if they'll come to the party with a
Speaker 3: better rate. And then there's no there's really no work
Speaker 3: involved at all. Right, if you're dealing direct with the bank,
Speaker 3: you'll have to do that yourself. You have to wait
Speaker 3: thirty minutes on the one, three hundred numbers or whatever.
Speaker 3: If it's with US, we have software and systems that
Speaker 3: get you those discounts without you doing anything. Okay, So
Speaker 3: if you're still dealing direct with a bank, just just
Speaker 3: know that seventy percent of loans are done through brokers
Speaker 3: in Australia, So ask yourself why are you the three
Speaker 3: out of ten people in Australia that are still going
Speaker 3: direct to a bank.
Speaker 1: Okay, all right, let's talk about the savings now. You know,
Speaker 1: even things like saving on an annual feed that can
Speaker 1: be really beneficial as well. If you can negotiate like
Speaker 1: that getting a twenty five basis points off your homeland.
Speaker 1: People might think, O, well, that's hardly anything. But how
Speaker 1: does that play out on the cash flow and how
Speaker 1: does that pay out on paying off your home loan faster?
Speaker 2: Well? Can I answer that with an example?
Speaker 1: I love that?
Speaker 2: Think Okay, So I had.
Speaker 3: Clients who I got them their wonderful fixed rate, and
Speaker 3: you know, unfortunately we're all coming off those wonderful fixed rates.
Speaker 3: The lender, though with they offered them a decent rate,
Speaker 3: but they said, look, can we do better? And I said, yeah,
Speaker 3: I think you can. And so I was able to
Speaker 3: get them a better rate. And at that time that
Speaker 3: lender was offering no annual package fee, multiple offset accounts,
Speaker 3: so their savings were including all of that were one
Speaker 3: hundred and twelve dollars per month, and that over the
Speaker 3: life of the loan, that will save them forty seven
Speaker 3: thousand dollars Wow.
Speaker 1: Oh my goodness, they must have been cheering.
Speaker 3: They're not those sort of people. Maybe they just didn't
Speaker 3: want to show me or internally they were cheering. Yeah,
Speaker 3: but they were very happy, very happy.
Speaker 1: And it's huge. About forty seven thousand dollars is a
Speaker 1: lot of money, and that money can be then used
Speaker 1: for other valuable things in their lives.
Speaker 2: Yeah.
Speaker 3: Well, I'd help them build their new house, so you know,
Speaker 3: every dollar was important. They still had a few things
Speaker 3: to finish off. But also the addition to that is
Speaker 3: they're very disciplined and they are people who do like
Speaker 3: to have different buckets of money in different account They've
Speaker 3: averaged around twelve thousand dollars savings across their multiple offset accounts,
Speaker 3: so that save an addition another forty five thousand dollars
Speaker 3: in interest over the life of the loan.
Speaker 1: On top of the forty seven the top of the
Speaker 1: forty seven, So this is close to one hundred thousand
Speaker 1: dollars in interest, that's right, being saved by getting vrasal
Speaker 1: advice from a mortgage broker that they let's be honest,
Speaker 1: they probably wouldn't have gotten necessarily from the bank.
Speaker 3: Well, they wouldn't know that that offer was out there, Yeah,
Speaker 3: they wouldn't know.
Speaker 1: Yeah, my goodness. All right, So okay, these savings are
Speaker 1: just compounding. All right. Let's move on to this concept
Speaker 1: which I've seen a lot on social media and I'm
Speaker 1: sort of on the fence with. But it's the concept
Speaker 1: of paying your mortgage weekly instead of fortnightly or monthly.
Speaker 1: What are your thoughts on this?
Speaker 2: Okay?
Speaker 3: Well, again, it's a it's all the pair of small
Speaker 3: amounts of money. It doesn't make that big a difference.
Speaker 3: So if you pay weekly on a five hundred thousand
Speaker 3: dollars mortgage, the saving over the whole life of the
Speaker 3: loan is seven hundred and forty eight dollars, okay, And
Speaker 3: then on eight fifty thousand dollars loan, the saving is
Speaker 3: one two hundred and seventy one dollars right over the
Speaker 3: life of the loan, So that we're not getting those
Speaker 3: that those big numbers that we're getting with the other ideas.
Speaker 3: But again, if you do that in addition to everything else,
Speaker 3: then it's all better off in your pocket than someone
Speaker 3: else's exactly.
Speaker 1: So just making sure that you consistently stick to it.
Speaker 3: And there's another point on the weekly is that some people.
Speaker 3: We go back to the importance of budgeting. Some people
Speaker 3: just can work a budget better weekly rather than monthly,
Speaker 3: so again that might tie in with that as well,
Speaker 3: So that's an important point too.
Speaker 1: I completely agree with that. I run a budget and
Speaker 1: cash flow academy program teaching people how to do a budget,
Speaker 1: but how to stick to it. And you know, part
Speaker 1: of the sticking to it is actually building the cash
Speaker 1: flow system. And I say to people the key to
Speaker 1: making your budget easy to stick to is to make
Speaker 1: it consistent. So as many bills that you can take
Speaker 1: that are irregular or even add hoc and make them
Speaker 1: weekly for that le or monthly, the easier it is
Speaker 1: to manage your cash flow and therefore stick to the budget.
Speaker 1: The only reason why I sit on the fence a
Speaker 1: bit with paying weekly versus monthly is if you're being
Speaker 1: paid monthly, it can be a bit of a bit
Speaker 1: off with the way the payday cycles fall if it's
Speaker 1: coming out every Thursday, because they maybe five thursdays, you
Speaker 1: know in your pay cycle, but you haven't been paid
Speaker 1: yet and you can sort of run short of cash flow.
Speaker 1: So it does need a lot more meticulous account keeping,
Speaker 1: and that's where it can sometimes cause havoc for people
Speaker 1: with their cash flow. But if you can pay weekly
Speaker 1: and you have no problem handling that and managing that,
Speaker 1: absolutely it's something you know definitely worthwhile doing, and those
Speaker 1: savings add up every single year after year. All right,
Speaker 1: think that The next one I want to talk to
Speaker 1: you about is reviewing your progress. I mean, I love
Speaker 1: the saying what gets monitored gets made. For Tom and
Speaker 1: I are family, one of our big financial goalses here
Speaker 1: is to try and make some inroads with our mortgage.
Speaker 1: And for me, I know personally and professionally by checking
Speaker 1: our mortgage on a regular basis, and I probably do
Speaker 1: it more often than I should, but I know my
Speaker 1: numbers and I can then see opportunities. Do you agree
Speaker 1: with this, and what would you recommend people do to
Speaker 1: help review their mortgage and how can we justify the
Speaker 1: time to see those savings?
Speaker 3: Firstly, just ask yourself some key questions. You know, is
Speaker 3: the rate that I'm getting the best rate at the moment? Okay, Now,
Speaker 3: whether you want to answer that yourself, we'll get a
Speaker 3: broker to help you with that. That's personal preference. Within
Speaker 3: that then is it worth changing? And there's a question
Speaker 3: around there around does the loan still still meet your needs? Then,
Speaker 3: as part of that review process, back to motivation and
Speaker 3: back to positive I'm a big believer in positive reinforcement.
Speaker 3: Is okay, look back, how much extra have you paid
Speaker 3: on your loan and understand what the benefit of that is.
Speaker 3: How much have you been able to keep it an
Speaker 3: offset account, and then understand the benefit, Because if you
Speaker 3: understand the benefit and the savings, then that should give
Speaker 3: you motivation to continue doing it.
Speaker 1: Yeah, absolutely all right. Then finally talking about the concept
Speaker 1: of an investment property. This is something you mentioned and
Speaker 1: I hadn't actually ever thought about this before. How can
Speaker 1: we include the idea of property and building wealth and
Speaker 1: save off our home loans at the same time.
Speaker 3: So all the ideas we've talked about prior to this
Speaker 3: one are progressive mortgage management type ideas, whereas if you
Speaker 3: have the ability to buy an investment property, and if
Speaker 3: that investment property does a pre ciate with capital growth,
Speaker 3: then it can be a real game changer. So think
Speaker 3: about buying an investment property. It could be negatively geared,
Speaker 3: which means you could get a tax return which then
Speaker 3: could go on your personal mortgage. Again, that's something yet
Speaker 3: to talk to your accountant about a lot of people
Speaker 3: understand that principle. So again that's giving you that ad
Speaker 3: hoc more progressive saving. But then the real game changer
Speaker 3: is in ten twenty years, if that property increases in value,
Speaker 3: then your strategy could be Okay, I'll realize the profits
Speaker 3: and have that lump summon, then apply it to my mortgage,
Speaker 3: and then you could be debt free earlier rather than
Speaker 3: the twenty five to thirty years.
Speaker 1: Wow, that's quite incredible.
Speaker 3: So just on that, I had a client who was
Speaker 3: looking to upgrade, and when I looked at their numbers,
Speaker 3: I said, look, you can buy your next place and
Speaker 3: still keep this one because at that time the market
Speaker 3: wasn't great, so they had a good buying opportunity, but
Speaker 3: then a selling opportunity in that same market wasn't great.
Speaker 3: And also the other thing by getting them their new
Speaker 3: home and keeping their home as an investment property, what
Speaker 3: that allowed them to do avoid bridging finance, which was
Speaker 3: expensive as well. By holding on to one of their
Speaker 3: properties and then selling it when the market conditions were better,
Speaker 3: they've been able to pay a further one hundred and
Speaker 3: twelve thousand dollars off their loan and they're better off
Speaker 3: by that number compared to if they just upgrade it
Speaker 3: all in the same market.
Speaker 1: Oh my goodness. All right, Okay, so these are fairly
Speaker 1: complicated strategies. You really do need to get not just
Speaker 1: advice on, but you need experience absolutely and professional advice.
Speaker 2: Absolutely.
Speaker 1: I wouldn't be you know, you need to see someone
Speaker 1: who's a personally. They've done it themselves as mortgage broker
Speaker 1: has done this multiple times for their clients, and those
Speaker 1: the intricacies and how to set this up correctly the
Speaker 1: first time, the right way exactly. All right, Look, just
Speaker 1: to quickly recap because this has been I mean, I
Speaker 1: think we've probably got at least I think if my head,
Speaker 1: I've worked out aout at least two hundred thousand dollars
Speaker 1: worth of savings from this one episode off your home loan.
Speaker 1: If you can apply this straight away, apply it consistently
Speaker 1: and even dare I say build upon this this time
Speaker 1: and savings potential explodes. And I've never someone who ever
Speaker 1: regretted paying off their home loan sooner and faster. So
Speaker 1: just to go a quick recap for everyone who was
Speaker 1: listening to this episode. Number one, please go and do
Speaker 1: a budget. If you want Joss Bank statement access where
Speaker 1: you can have his program, look at your budget and
Speaker 1: look at where you can potentially save money, and of
Speaker 1: course take him up on that offer for a free
Speaker 1: mortgage health check. I will be making sure I put
Speaker 1: John's contact details, both his email address and his phone numbers.
Speaker 1: You can pick up the phone and have a conversation
Speaker 1: with him about your home loan. But promise me this,
Speaker 1: you will go and do a budget. You will see
Speaker 1: what extra payments you can and of course jump on
Speaker 1: the Blue Lanterns website, look at their calculators, look at
Speaker 1: the sugarmumb calculators and see the impact of those savings,
Speaker 1: and of course make sure you apply those savings by
Speaker 1: increasing your automatic mortgage repayments by that exact amount so
Speaker 1: that those savings don't get spent elsewhere. Of course number
Speaker 1: two is to look at a redraw facility or an
Speaker 1: offset account. What savings do you have floating around an
Speaker 1: online savings account that would be better off sitting in
Speaker 1: an offset account or a redraw facility. Again, a good
Speaker 1: quality mortgage broker will help set this up for you
Speaker 1: so that this is working to your financial advantage. Number
Speaker 1: three is look at ad hoc repayments. I use a
Speaker 1: very simple example of the average Australian getting about two
Speaker 1: and a half thousand dollars per year back is a
Speaker 1: tax refund. You could go and spend that two and
Speaker 1: a half thousand dollars, or if you wanted to, you
Speaker 1: could put one thousand or even two thousand onto your
Speaker 1: home loan, and the savings really are substantial. As John
Speaker 1: has just explained, every one thousand dollars put as an
Speaker 1: ad hoc repayment represents potentially up to five thousand dollars
Speaker 1: in savings, So it's really literally like almost like a
Speaker 1: risk free gambling if you like. Of course, Number four
Speaker 1: is shopping around for a better deal. Do not let
Speaker 1: yourself become a victim of loyalty tax, Do not get lazy,
Speaker 1: do not get complacent, and don't feel overwhelmed. Refinancing is
Speaker 1: actually very smooth, very simple, and this is why mortgage
Speaker 1: brokers get paid by the banks because they do all
Speaker 1: the hard work for you.
Speaker 2: Either.
Speaker 1: The biggest thing that people say to me when they've
Speaker 1: spoken to Adam or to Joe or to John is
Speaker 1: thank you so much. I can't believe how much they
Speaker 1: were able to save us. We can't believe they feel
Speaker 1: like they've almost like won the lottery. So shop around
Speaker 1: for a debt of bill. Please don't ever settle, Please
Speaker 1: don't ever be complacent about this. I would rather the
Speaker 1: money be in your pocket rather than the banks, even
Speaker 1: though I am a bank shareholder. Number five is to
Speaker 1: consider if you can weekly repayments instead of fortnightly or monthly.
Speaker 1: These may seem like small savings, but if you're in
Speaker 1: a really tight budget and you can't make those extra repayments,
Speaker 1: you can't make ad hoc repayments. You already have the
Speaker 1: redoor facilities set up for emergency money and stuff like that.
Speaker 1: This is a really simple way of not having to
Speaker 1: find any extra money, but actually being able to save
Speaker 1: a lot of money. And again those that interest savings
Speaker 1: of seven hundred and forty eight dollars per year is substantial,
Speaker 1: especially over the course of a thirty year loan. And
Speaker 1: number six is obviously reviewing your mortgage repayments as I
Speaker 1: have shared with you guys, and I sound a little
Speaker 1: bit OCD and judge me if you like, but I'm seeing,
Speaker 1: for once our mortgage coming down at a faster rate
Speaker 1: I'm seeing our emergency money building up, but what gets
Speaker 1: monitored gets made. I would truly believe that it is
Speaker 1: so exciting when you see the actual cost of your
Speaker 1: interest repayment getting taken out of the bank slowly reducing.
Speaker 1: That is true savings in your pocket that hasn't in
Speaker 1: nuts involved you necessarily having to sacrifice. I haven't had
Speaker 1: to give up my gym membership or subscriptions or you know,
Speaker 1: my monthly uber eats by making a simple change in
Speaker 1: the way that you manage your cash phone. Of course,
Speaker 1: I will link in the podcast notes the Sugar Mamma
Speaker 1: Budget and cash Hood Academy if you want to learn
Speaker 1: how to do a budget and stick to it. Number
Speaker 1: seven is looking at an investment property, and this is
Speaker 1: obviously not available for absolutely everyone because on everyone has
Speaker 1: an investment property, but there may be other assets around
Speaker 1: you that can be sold off, such as a share
Speaker 1: pot follower and then reorganized into a debt recycling strategy
Speaker 1: to help you save tens, if not hundreds of thousands
Speaker 1: of dollars off your home loan and debt recycling strategy
Speaker 1: is a very powerful one. I will definitely make more
Speaker 1: episodes around this, but for the right people at the
Speaker 1: right time, using the physical the right reasons. Yes, it
Speaker 1: can save you a substantial amount of money off your
Speaker 1: home loan, but also allow you to build wealth outside
Speaker 1: of the family home. So these are really important things
Speaker 1: that you need to be listening to and thinking about
Speaker 1: and applying in your life. And of course, if you
Speaker 1: are feeling stuck, if you are overly overwhelmed, don't use
Speaker 1: this as a block and not do anything. Pick up
Speaker 1: the phone, give John a call, ask him about what
Speaker 1: he can do for you, give me your details, let
Speaker 1: him on some numbers. It costs you absolutely nothing, and
Speaker 1: you have so much to gain, all right, John, Sorry
Speaker 1: I took a little bit passionate there. Thank you so
Speaker 1: much for coming on to show I really appreciate it.
Speaker 1: This has been such a powerful and valuable list. And
Speaker 1: there are other things, of course beyond these seven things,
Speaker 1: but I'll let you share those insights and ideas with
Speaker 1: people that maybe you perhaps want to reach out and
Speaker 1: speak to you. If they want to speak to you directly,
Speaker 1: of course, your contact details will be linked below, including
Speaker 1: obviously if they want to get access to the bank statements.
Speaker 3: Sure so, email or phone either is fine. Text me
Speaker 3: on the way you know, you know, if you're on
Speaker 3: the bus. Just obviously a bit of background as to
Speaker 3: you know, how you got my number and you know random.
Speaker 2: Yeah, so you'll find my.
Speaker 3: Colleagues and myself are very approachable and yeah, we just
Speaker 3: want to help.
Speaker 1: And just to reiterrect to everyone listening, I have absolutely
Speaker 1: zero connection with blue Land and get asked all the
Speaker 1: time who do I recommend? Who do I like? Who
Speaker 1: do I trust? And I'm not going to recommend someone
Speaker 1: I don't know that I haven't worked with, and I
Speaker 1: haven't seen for myself how they work. And as I said,
Speaker 1: you know, blue Lands look after myself, my family members,
Speaker 1: and my friends, and I've only ever had amazing feedback.
Speaker 1: I get zero benefit from doing this other than the
Speaker 1: fact that I get to sleep at night knowing that
Speaker 1: you're in really good hands with someone who's reliable, honest, transparent,
Speaker 1: and he's bloody good at their job. All right, everyone,
Speaker 1: thank you so much for listening today's episode on Sugarmuma's Fireplay.
Speaker 1: If you enjoyed this episode, please make sure you go
Speaker 1: and send it to your friends, send it to your
Speaker 1: partner if you have one, send it to your family members,
Speaker 1: because I really want to help Australians get their mortgages down,
Speaker 1: actually see that they are powerful and capable of doing
Speaker 1: this for themselves. And of course it doesn't actually take
Speaker 1: too much effort to start to see a shift, a
Speaker 1: breakthrough as those mortgage repayments reduce, those interest costs come down,
Speaker 1: and you actually see that you're making substantial headway and
Speaker 1: saying goodbye to that thirty year prescription made by your
Speaker 1: bank and hello to fifteen, ten or even five years
Speaker 1: mortgage terms. How good would that be? All possible when
Speaker 1: you apply financial literacy to your financial situation, of course,
Speaker 1: including all of those important valuable goals and trips. Thank
Speaker 1: you everyone for listening to Sugarmuma's fireplay. In the meantime,
Speaker 1: keep that financial fire burning Bright Chapel