Mortgage Freedom Plan

Wish to get freedom from mortgage…sure why not?

New Zealand market has seen a significant surge in the house prices in recent years. There are a lot of contributing factors like increased number of migrants leading to population growth, historically low-interest rates, slow housing supply, and strong housing demand to name a few.

When a family goes into the market to buy their first home, they typically have a very low deposit to offer which is available from their KiwiSaver, savings, and support from family. If they buy a decent house worth $800K (which is lower than median house price in Auckland) and offer 20% deposit i.e. $160K, they are looking at a home loan of $640K. If that family would have bought the same house couple of years ago, they would be looking at buying a similar house in the range of $600K or so and if they would have given 20% deposit at that time i.e. $120K, their home loan would have been $480K. What we are trying to say is, the recent increase in the house prices have put pressure on new entrants to the housing market because their home loan size has increased considerably but incomes have not increased in that proportion for everyone.

We have noticed the anxiety, pressure, and fear in young minds because when they are taking a big mortgage on their head, they are taking a big commitment certainly for a long time which they need to honor in all circumstances no matter what. They also need to make sure that they return the full amount of mortgage along with interest to the bank so that they are mortgage free.

You can’t reduce the principal amount you have borrowed from the bank because that is based on your purchase price and amount of deposit you have put in. At Finance Matters, we guide you to manage your finances in such a way that you get mortgage free sooner and don’t pay unnecessary interest to the bank.

Being the proud owner of your dream home is a great feeling. What you don’t want is the mortgage on your dream home so everyone having mortgage wants to know “How to get mortgage free…faster”. They want to achieve this so that they jump on to the things they have been waiting for a long time during the lifetime of their home loan e.g. go for their dream vacations, upgrade their house, upgrade their car etc. But the real fact is that in order to pay off the mortgage faster, they need to be smarter and make sure that they know which direction they are heading into.

Often, people think that selecting a good loan structure is the only way to get mortgage free faster. In our opinion, loan structure is one essential part out of a range of ways in order to get freedom from your mortgage.

Contact our friendly team at Finance Matters and we can design a personalised plan for you which can help you to become mortgage free faster.

In simple terms, mortgage means loan taken from a lender by allowing charge over the property as a security.

This word is very commonly used in our Kiwi world and a majority of the people end up paying the “mortgage” for most of their life.

According to a report published in Stuff, almost 1/3^rd of the people won’t have paid-off their mortgages by the standard retirement age of 65 years. Isn’t it a BIG worry that even after our retirement, we have the mortgage left on us?

Should this be taken so lightly? Should this be a part of our lives? Do we really need to live our life with this burden for so long? Ask this to yourself and if you have a clear vision in your life, you will say NO to all the above questions.

Now the big question is “should we take a mortgage to buy a house?”. The answer is YES if you do not have enough money to do that. BUT once you borrow this money, the target should be to pay this off as soon as possible and not stretch it to 30 years which is the loan term generally given by the banks in NZ. Paying your mortgage for 30 years means paying money to the bank for that long which otherwise could be used towards your holidays, child’s education, upgrading lifestyle, setting up some business, clearing your bucket list etc., if you could pay the mortgage off earlier.

Introducing our “MORTGAGE FREEDOM PLAN”

We at Finance Matters can help you to pay-off your mortgage faster so that you can save on interest. We sit with you to evaluate your ability to pay-off the mortgage and create a strategic plan for you according to your financial circumstances, financial goals and financial priorities which can help you to get rid of the mortgage faster. In most of the cases, this is achievable without even increasing your loan repayments. We call it “MORTGAGE FREEDOM PLAN”.

Case Study:

Hamish and Ash* had a mortgage of nearly $469,000 on “interest only” mortgage repayments which means their principal loan amount was not reduced at all since they bought their house. When we asked the clients, why did you keep your mortgage on interest only repayments, they commented that their previous mortgage adviser suggested them this to maintain the same lifestyle they had earlier to buying their first home. They did not have any idea on how to reduce their mortgage and approached Finance Matters through the referral from one of our happy customer.

After evaluating their situation and keeping their financial goals, circumstances, and priorities in mind, we found out that they have good stable income and savings capacity. We introduced them without our “MORTGAGE FREEDOM PLAN”. During the process, we educated them around “Dos and Don’ts” and keep reviewing their mortgage with us from time to time so that we can suggest any changes required according to changed situations so that they can finish their mortgage much faster with the help of our “MORTGAGE FREEDOM PLAN”.

Benefits of implementing “Mortgage Freedom Plan” for them:

Refinanced their mortgage at a better home loan rate;
They also received good amount of cash back;
Changed their mortgage to “Principal & Interest” instead of “Interest Only”;
Now, they can finish their mortgage in 9 years and 7 months rather than keeping it on non-reducing term to save more than $320,000 in interest if they were not considering any lump sum payment towards their mortgage otherwise;
They can maintain the same lifestyle and don’t need to make any adjustments;
They are in a stronger position now to start building their investment property portfolio.

What are we trying to convey?

Finance Matters will help you not only to pay-off your mortgage faster but can also help you to grow your property portfolio leading you towards the better financial position. We will hold your hands throughout the journey and guide your way.

Our motto is:

You Dream

We Plan

You Achieve

Mortgage Freedom Plan​

Mortgage Freedom Plan