pay off your portage in 1/3 the period?

[dymesgirl]

As the title says is it at all possible? Have recently had a consultation with a bloke who claims if you pay him a fee (reasonable if claims are true) he will teach you how to pay down your mortgage in a very short window. Has anyone has experience with a scheme such as this or is it modern day snake oil?

 

[granta]

@dymesgirl Yes it is possible.

Step 1: Don't give him any money
Step 2: Put the money you would have given him onto the mortgage.

 

[dymesgirl]

@granta Great financial advise! Thanks mate

 

[lilymaid]

@dymesgirl That’s going to cost you

 

[lexloci90]

@dymesgirl Can't get any simpler than that.

Don't pay anyone to help you. There are plenty of resources online with regards to making extra repayments, being disciplined with spending/saving, loan structure etc.

Whatever money you had available to pay the 'advisor', put straight into your mortgage and you'll be off to a great start.

 

[helentina]

@granta

Step 2: Put the money you would have given him onto the mortgage.

Don't do this.

Get a 100% offset account, and use that instead.

Put every last cent you have into this account, including your salary, etc...

Pay for everything by credit card, pay it off from the offset account at the end of the interest free period.

 

[granta]

@helentina Don't do this? then you proceed to do just that.
Although the same principle. I found revolving works better than offset.

 

[helentina]

@granta

Don't do this? then you proceed to do just that

Big difference between paying extra into your mortgage and using an offset account.

I found revolving works better than offset.

Use both, not one or the other.

With an offset, the money is available to you whenever you might need it for anything you might need it for.

 

[rdh21761]

@helentina Revolving also allows you to draw down money , that's the whole point of it.

You can save years on a mortgage term, but you need discipline. I can't stress this enough, if you are good with money and don't purchase frivolous shit, then it's the way to go. If you're not so good, just continue with a conventional mortgage.

 

[clara123]

@helentina Offset accounts are floating rate only right? So you’d be paying extra in interest for this option.

 

[caveman]

@clara123 Yes, but no.

Say the offset rate is at 10%, but you savings is equal to 1/2 the offset amount, this would be effectively 5% interest as you only pay interest on what's not offset.

 

[clara123]

@caveman That’s the same with a fixed loan though, you’re only paying interest on what you still owe.

Fixed rates are typically lower though.

 

[caveman]

@clara123 Not quite, with a fixed you're paying interest on the whole outstanding balance. With offset it's only the amount not offset.
And with a fixed loan, the money you put on it isn't available to you to use at any time.
Also you are limited in the extra you can put towards it.

The point of offset and revolving is that the money is always available to you, and that you can make extra 'payments' to it at any time.
That money you need in the future is available, but otherwise negating interest charges until that point in time.

 

[clara123]

@caveman I guess the main thing is how much savings op has lying around. I looked at this when we refixed earlier in the year and we needed around 25-30k in our accounts for it to be worth it for offset which we didn’t have.

 

[brianp24]

@dymesgirl You pay off your mortgage in 1/3 the period by paying slightly less than 3x the minimum payment.

There you go, that'll be $5000 please. I don't accept bitcoin anymore.

 

[dymesgirl]

@brianp24 How did you know the fee?

 

[brianp24]

@dymesgirl I could tell you, but that knowledge also incurs a fee.

 

[godwhispers]

@brianp24 Questions also incur a fee. Take another $1000.

 

[brianp24]

@godwhispers I just read your reply. The reading fee for that is $500. Still no bitcoin please.

 

[michele0410]

@dymesgirl Don't listen to him.I can do it with no fees, just a small surcharge and ongoing gratuities.