June 8, 2025 • 33 mins
Paying off your mortgage sooner is a lot easier than you think it is. Today we are joined by John Micalizzi from Blue Lantern Mortgage Brokers to help explain all the different options and ideas that are available to you to help pay your mortgage off sooner than the standard "30 year diagnosis".
If you would like to chat with John about your mortgage and how to pay it off sooner, you can email him John.micalizzi@bluelantern.com.au or 0411 706 228
These are the calculators that we recommend using, to help see what is possible and how much time and money you can really save when you apply these ideas that we share in this episode...
https://bluelantern.smartonline.com.au/calculators/
https://www.sugarmamma.tv/calculators/
Let me know what you think of this episode by reaching out to me @SugarMammaTV so that we can keep this conversation going, and don't forget, you can also send your own "Start Here" questions in.
Here are my two books:
Best Seller: The $1000 Project Book: https://amzn.to/3RV0Bnq
Mindful Money: https://amzn.to/3RV0poc
(affiliate links)
In the meantime...
HOW YOU CAN WORK WITH ME (& I CAN HELP YOU): (includes one-on-one appointment with me...)
If you need help with your budget or are sick of living paycheque to paycheque, you can enrol into The SugarMamma Budget & Cashflow Academy course, which includes a one on one appointment with me so that I can help you. Enrol here: https://courses.sugarmamma.tv/Signup
Also, if you want me as your Money Mindset & Manifestation coach, which includes ongoing access to my general help through motivation, clarity and support you can join below and put some game changing changes in your life!:
https://courses.sugarmamma.tv/join
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ADDITIONAL GENERAL ADVICE WARNING:
Whilst we discuss various financial topics, this podcast is not advice in anyway, but purely for educational purposes only. Nothing in this podcast is personal advice, investment advice or product advice. With any major financial decision, you must always do your own research, consider all the pros and cons, fees, caps, limits, costs, taxes etc. Always proactively educate yourself before making any major financial decision, consider your own financial goals, deadlines and risk profile. So please bear all of this in mind when listening to this podcast and please always speak to a Financial Planner when wondering what you should do to achieve your own financial goals and dreams.
GENERAL ADVICE WARNING & FINANCIAL PLANNING LICENSE DETAILS:
The information in this podcast is general in nature and does not take into account your personal circumstances, financial needs or objectives. Before acting on any information, you should consider the appropriateness of it and the relevant product having regard to your objectives, financial situation and needs. In particular, you should seek independent financial advice and read the relevant Product Disclosure Statement or other offer document prior to acquiring any financial product.
Canna Campbell is an Authorised Representative and Financial Adviser of Links Licensee Services Pty Ltd AFSL No. 700012 ABN 97 678 975 589.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Good morning, everyone, and welcome back to another episode of
Sugar Mumma's Fireplay. I am your host's financial planner, Canna Campbell,
and today I want to waste no time at all
because we're talking about your mortgage, and we're going to
talk about seven different ideas for you to apply right
now today for your mortgage so that you can save
valuable time and money. And I'm not talking about small
(00:20):
dollars here or silly amounts of time. I'm talking tens,
if not maybe hundreds of thousands of dollars and shaving
years off your home loan. This is something I'm really
serious about you understanding how your mortgage works and the
things that you can actually do that are really not
that hard to save you so much time and money.
And of course, the moment that mortgage is paid off, woohoo,
(00:40):
there are so many other tools that we can start
playing with to build wealth outside of your home. Of course,
now to help us break down all these ideas, these
very powerful ideas, these practical ideas, these simple ideas, I
am joined by John Micklzzi from blue Land and Financial Services.
As you know, we've previously had Adam McCabe in the
studio plenty of and I decided to mix things up because
(01:02):
Blue Lantern is actually who I recommend for mortgage brokers.
I get zero benefit from doing this. I'm just happy
to share contacts of people that I know and trust,
but more importantly, people that I have worked with for
tens of years and actually do my own personal mortgage
broking and investment loans, as well as my family members
and all of my friends. So if at any time
(01:22):
you think you know what, I need to speak to
these guys. They sound really good. They are, and of
course I will link all the contact details in the
podcast notes so you can quickly and easily connect with
them whenever you feel ready. Now a quick reminder, of course,
all of these podcasts are general in nature and for
educational purposes only. All right, now that we've got that
important compliance requirement out of the way, let's hit the
(01:42):
ground running. John, good morning. Thank you for coming into
the studio and to talk about this. And I'm so
serious about Australian's realing what they can do with their
home loans to actually get the monkey off their back.
(02:02):
Do you agree that we need to be paying more
attention to our homelands?
Speaker 2 (02:06):
Absolutely? And I could not agree with you more, Kenna.
Speaker 1 (02:08):
We have a great calculator on the sugar Mumba website.
It's an extra repayment calculator at a combined lumpsung. You
just simply plug in your details and see what an
extra fifty dollars per month, plus say an extra thousand
dollars bonus each year on your homelan doesn't see the
term drop and see the amount of savings add up.
And of course that's subject to interest rates remaining the
same and of course making sure you don't draw that
(02:30):
money back out again. But you have a choice, and
you really can actually pay off the whole mortgage so
much faster. You are not dictated by the bank or
your lender. But look, let's get cracking because we've got
seven ideas that we want to break down together as
to how to pay off your home loan off as
quickly as possible. Before we begin, I'm just sorry, I
just don't want to hit the gray money. Can you
just give everyone the quick introductionist to who you are,
(02:51):
because obviously everyone's used to hearing Adam on the show.
Can you explain to everyone what you do and how
you fit in at Blue Lantern.
Speaker 2 (02:56):
Sure, So there's a few brokers at Lantern. I'm Johnny.
Speaker 3 (03:00):
Let's see on one of the team, and so we
bread the workout evenly between the team, depending on a speciality,
depending on who's available, depending on you know, where that
client has come from. So there's always good coverage for
anyone that wants to come and have a chat with us,
do a mortgage health check, get ready for a purchase.
So briefly, that's my work splits into two. So it's
either helping people purchase the property, but then importantly staying
(03:22):
with them after that, you know, working with them through
the life of the loan to ensure that you know,
they are trying to minimize interest costs and they are
getting to total home ownership or at least comfortable levels
of debt as soon as possible.
Speaker 1 (03:33):
That ongoing service is completely underestimated. And I say that
because I know how much I rely on Blue Land
and to review my home loan, to call the bank
on my behalf and negotiate a better interest rate, you know,
when it's time to refinance, because the bank won't match
what they're paying new customers or what the competitive rate is.
And that guidance as to how to actually structure the
loans in the right way, because there are lots of
ways to pay your home loft and lots of different
(03:55):
ways that suit different people in different situations or different
periods of their lives. So that ongoing service is actually free,
isn't it.
Speaker 3 (04:01):
That's exactly right, And I'll go into more detail about
this later.
Speaker 2 (04:05):
Because of our business model, not all brokes are the same.
Speaker 3 (04:07):
We are compelled, you know, to look after you and
to give you options and to make sure that everything's
working well for you. And this is no disrespect to
banks because obviously we do source funding from banks. We've
work with them, we work with them, but they are
not compelled to do anything. They only have to explain
their products and services.
Speaker 2 (04:23):
That's it.
Speaker 1 (04:24):
Look for anyone who is a mortgage right now, they've
never had any ongoing relationship in helping power their bank.
Can this be your sign to pick up the phone
and find a good quality mortgage broker that's going to
work with you. And you know, the way I would
describe what you guys do is you're almost like a coach.
And look, Adam has always done our home loans and
investment loans, and I have him on speed dial, and
it makes it makes the difference because you do make
(04:46):
greater inroads and you make better progress and you tick
those goals off. So all right, let's get started. Number one.
The first thing to do, and when it comes to
trying to pay for your home loan as quickly as
possible is to do a budget. But can you explain
why and how effective this is?
Speaker 3 (05:00):
Certainly, so to try and determine, okay, where could you
make savings and where can you make inroads? You've got
to understand what your current expenditure is and try to
categorize it. To think about categories such as your mortgagey payments.
Obviously that's the first start, but then things like utilities, rates, insurances, communications, expenditure,
so those things that you might think, okay, well they're
(05:22):
sort of fixed in nature. And then there's other categories
such as groceries, eating out, recreation, entertainment, which are more discretionary, right.
Speaker 1 (05:30):
And't mentalize these expenses exactly, so you can sort of
focus purely on looking at the utilities expenses, the gas, electricity,
the water, see what you can't really do too much with.
And then obviously look at the groceries, alcohol, you know,
those other inns absolutely which are more volatile or fluctuate.
Speaker 2 (05:47):
Yeah.
Speaker 3 (05:47):
So I have people who say, oh, you know, my
credit card bill is three thousand dollars a month, so
that's my expenses. But that's just to have one number.
It's hard to make inroads into it unless you break
down that number and see, okay, where can I perhaps
improve what can't be improved, So.
Speaker 1 (06:01):
You've got to do a deep dive. Yes, I completely agree. Now,
you and I were chatting on the phone and we
were talking about this thing called bank statements dot com
and you've given me example, and I have to say
it's quite fascinating because it basically is a software system
that breaks down and does all that. It's almost like
an AI of budgeting because it breaks down, it compartmentalizes
everything for you so you don't need to do it yourself.
So then you can then look at each individual category
(06:22):
and see what needs to be cut down or cut out.
Can you explain how you use this to help clients
and also how does someone get their hands on this,
because it's extremely helpful.
Speaker 3 (06:31):
So when I do a mortgage, health check, or a
brief finance or even a purchase. Part of that process
is understanding living expenses. And then when it comes to
getting data from people, so for example, credit card statements,
personal loan statements, home loan statements, we have this service
whereby it's automated, it's secure, where the statements come directly
(06:51):
to us. And then importantly with that comes an analysis
of expenses. Okay, And that's important because someone might say, oh, yeah,
we spend you know, three hundred dollars on recreation and entertainment.
Then the data says, well, it's one thousand dollars, right,
and there's no wrong or right answer. But then it's
a conversation to say, do you want to limit your
recreation attainment to three hundred or is it actually one
(07:12):
thousand dollars a month?
Speaker 2 (07:14):
And you don't want that to change?
Speaker 3 (07:15):
Okay, So that's just a conversations awareness.
Speaker 2 (07:19):
It creates awareness.
Speaker 3 (07:20):
You hear stories in the media about, you know, the
bank look through my expenses and they questioned why I
was going to McDonald's every week.
Speaker 2 (07:27):
I don't care. You know, maybe invite me longto McDonald's.
I don't know. But it's not a deep dive.
Speaker 3 (07:32):
I don't go into what you're spending on where it's
more the headline numbers. If you want to, if you
want the data to go in and perhaps look where
you can improve, fine, I'll give it to you. But
it's not a deep dive exercise for me into too
far down. And there's no judgment in the process at all.
Speaker 1 (07:49):
Oh gosh. I mean you and I both know there's
no judgment where it comes to people's personal finances. You know,
everyone has their own personal value system, and for us,
at really the end of the days, we're there to help.
So if someone comes from saying we need help, we'll
look at it with a view to help, not to
of you to judge. And I mean, look, I've got
an example in front of you right now that you've
given me, and I have to say it's brilliant because
immediately my eye went to certain expenses. I was like,
(08:09):
oh wow, you know you could actually make an extra
eighty dollars per month for repayment just by looking at
this one particular expense. It really does break it down.
So I mean, I'll put for everyone that's listening right now,
obviously John's contact details, but I believe you're happy to
give some people access.
Speaker 2 (08:23):
To this as part of a mortgage health check.
Speaker 1 (08:26):
As part of the mortgage health check. So, I mean,
what a brilliant opportunity for everyone to get a great
refresh of their budget through this amazing service and get
some help from you. So all right, Realistically, people think, oh,
a budget, it's like doing going to the dentist. You
don't want to do it, you procrastinate. But the smallest savings,
this particularly a regular basis on a mortgage, can actually
save you thousands of dollars exactly. Can you give us
(08:47):
a couple of realistic examples to how much you know,
some you know, say one hundred and fifty dollars per
month that you might find from your budget when applied
to making an extra repayment on your homeland. How much
really are we talking about? Because I feel like when
people hear that how much, they'll say they'll want to
go do their budget immediately. So can you give us
an example, a realistic example as to how much someone
(09:08):
can save from a time point of view and from
an interest point of view by doing their budget and
fighting say an extra hundred dollars or extra fifty dollars
or an extra hundred and fifty dollars per month that
they can apply to their homelan.
Speaker 2 (09:18):
Sure.
Speaker 3 (09:19):
I call it the power of small amounts of money,
and it shouldn't be sneezed at. So I will do
it on an annual basis. So that way, maybe that's
even that's more achievable for someone. If someone puts a
thousand dollars extra on their home loaner per year, yeah,
per year, right, that thousand dollars saves five thousand dollars
in interest.
Speaker 1 (09:35):
Wow, so that's not even one hundred dollars per month,
that's right. What are we using as an average mortgage
size here?
Speaker 3 (09:40):
So that's for a five hundred thousand dollars average mortgage size.
Even up to eight point fifty, the saving is a
little bit more. But just think in rough terms, one
thousand dollars on five thousand dollars off in interest.
Speaker 1 (09:53):
That is amazing.
Speaker 2 (09:54):
And what's the average interest rate you're using that I'm
using six point one five.
Speaker 1 (09:57):
Six point one five, okay, so that's a pretty competitive rate.
That's computer greedy in these numbers. So essentially it's like
that one thousand dollars savings gives you back an additional
four thousand dollars in total, that's.
Speaker 3 (10:10):
Right, and the average time, so think about it takes
two to three months off your loan.
Speaker 2 (10:16):
Wow.
Speaker 3 (10:16):
Okay, so then again you do that every year, and
then you're starting to get into not months, but potentially
years at the end of the mortgage.
Speaker 1 (10:23):
Well if you feel most people are on a thirty
year mortgage. So if it's shaving two months off each
time you do this, it adds up very very quickly.
And also, as I said, like, that's what eight hundred
and eighty dollars a month extra pay, not even twenty
dollars a week, that's right. And if that is not
a bigger motivation to go and do a budget or
get a health check done by you and get an
AI program to do your budget, I don't know what
(10:45):
is all right? Next idea, let's talk about redraw facilities
and offset accounts. Okay, how do they work? And how
can I everyone listening right now use that to their
advantage to save tens of thousand dollars for their homeland.
Speaker 3 (10:56):
Sure, so whether you use a redrawal facility or offset
it has the same effect that simple.
Speaker 1 (11:00):
Okay, Can we explain the difference for everyone right now
between the two.
Speaker 3 (11:03):
So that one thousand dollars we're talking about, you can
pay that off your loan right and then if it
has a redraw of facility, you can get that back
if you need it.
Speaker 2 (11:13):
The discipline is not not getting touched. It's not to.
Speaker 3 (11:15):
Touch it, okay, but at least whilst it's in there,
it's saving you money. So you will literally see if
you put one thousand dollars in, if your mortgage is
eight fifty, it will come down to eight forty nine, okay,
So you will see the difference.
Speaker 1 (11:26):
And you'll low to be charged the interest on the
eight four nine exactly exactly.
Speaker 2 (11:30):
Cotant part exactly.
Speaker 3 (11:31):
Now, if you put one thousand dollars in an offset account,
same thing, same effect, So that.
Speaker 1 (11:36):
Since they're almost looking like savings in the offset account,
that's right, like it literally looks like an online savings account,
that's right link to all you accounts, but it's actually
offsetting the interest. So instead of the bank charging you
interest on eight hundred and fifty thousand, it's charging your
interests on eight hundred and forty nine exactly, okay, exactly
out of interest. Which do you prefer?
Speaker 3 (11:54):
I prefer offset accounts? Personal choice just like the flexibility
of having the money there. And also there are investment
properties in play, and therefore I don't want to put
money on the loan because I need the funds, and
I don't because once you put money on into investment loan,
you can't redraw it back without affecting your accounting.
Speaker 1 (12:14):
Can you give us an example of, you know, for example,
emergency money. I tell everybody you need to have emergency money,
and you need to have the right emergency money. And
I say to people, you know, if you can keep
your emergency money in either your offset account or a
redraw facility, how much does that save people in time
and money? Using those same examples of say it, I
think a six to fifty mortgage, or sorry, five hundred
(12:34):
thousand dollar mortgage, an eight hundred thousand dollars mortgage.
Speaker 2 (12:38):
Okay, So let's use the figure of ten thousand dollars. Okay.
Speaker 3 (12:42):
So let's just say you have been able to save
ten thousand dollars and that's your emergency funds, yes, okay,
And let's say you put them in an offset account.
Speaker 2 (12:51):
Okay. So on an eight fifty loan.
Speaker 3 (12:54):
The savings are over the life of the loan, fifty
one thousand dollars will be paid nine months.
Speaker 1 (13:01):
Earlier, assuming you don't take my emergency money out. Yes,
that is huge, fifty one thousand dollars. So just in
our first two tips alone, you know we've saved what
five thousand dollars by making an extra one thousand dollars
zero in payments each year yep, and then an extra
fifty one thousand dollars by using a redraw facility or
(13:23):
an offset account. Anyone that's listening to this episode right
now that has emergency money sitting in an online savings
account that's not connected to your home loan, please consider
getting some advice, obviously from John or from you know,
your own mortgage broker, about the best way to structure
is look into a redraw facility or an offset account.
(13:44):
And most of these facilities are free. They're part of
your loan package anyway.
Speaker 3 (13:48):
Some banks charge a package fee. Some banks don't charge
a package fee at all, but they still give you
an offset account. Then you can get really creative. Some people,
rightly or wrongly, they may not have the discipline. They
may have a certain way of banking, and for those clients,
if everything else matches up, for them, I suggest a
lender that has multiple offset accounts, so they can have
one account for the emergency funds where they don't have
(14:09):
to touch where it's they don't have to do the
everyday banking, and then they have other accounts that they
use for every day banking. And on that basis, that's
excellent because every dollar in every account every day is
offsetting against the loan.
Speaker 1 (14:20):
This is a little insight. My preference is actually a
redraw facility, So our emergency money systs in a redraw facility.
I actually just checked it this morning and it's slowly
getting back up there again. But we do have multiple
offset accounts for our other smaller goals, like we're saving
up to renovate our kitchen, we are saving up to
take the kids skiing overseas in June, So we have
(14:41):
those little smaller accounts bubbling away that are at least
offsetting the interest on other loans as well. So it
really is that combination is equally as powerful, but incredibly
effective and in saving you all the time. And I
love as a great source of motivation is that when
we pay our mortgage, I think around the twenty six
of every month and a couple ofdays later, I'll log
into my intet banking and look at the interest repayment
(15:03):
dropping and seeing that we're making a bigger, better progress
with that deduction.
Speaker 3 (15:07):
Everyone has their own motivation. I think it's important to
find your own motivation. Everyone has their own personal preferences. Yeah,
I've used redrawer in the past for different reasons. As again,
it's just my that's my personal preference, and it's about
finding what works works for you.
Speaker 1 (15:20):
All right, let's keep these savings bubbling long for our listeners.
So number three making ad hoc repayments. So you know
a lot, I know everyone's on a really tape budget.
They're like, where are we going to come up with
some extra ad hoc money? Well, you know, taking on
extra work. Perhaps you might get a tax refund. You know,
you might do a side hustle, you might declutter your home.
You know, gosh, my kids stayed to outgrow. They're all
(15:40):
going through gross spurts. And I've got so many things
that I could just list onto gum Tree or Facebook marketplace.
You know, even just an extra like one thousand dollars
can have an incredible effect. So we just quickly talk
about the power of ad hoc repayments.
Speaker 3 (15:52):
Yeah, so ad hoc repayments I think, if they can
be achieved, you know, are excellent because that's where you
really start eating into your mortgage.
Speaker 2 (16:01):
Right. The savings tips, yeah, they can be done.
Speaker 3 (16:02):
But the extra the ad hoc then again, you know
we're getting back to that. If you can find a
thousand dollars savings, and even if you find that extra
thousand dollars in income or cash or or whatever, again,
every one thousand dollars is a five thousand dollars saving.
Speaker 1 (16:17):
Wow. Did you know that the average Australian gets back
about two and a half thousand dollars per annum as
a tax return.
Speaker 2 (16:23):
No, I was not aware of that.
Speaker 1 (16:24):
So if we were to insteader of put one thousand
dollars onto the homelan, we put two and a half
thousand dollars, or even to say, let's say we take
put two thousand on the home loan and keep five
hundred for ourselves to keep a bit of you know,
I guess financial flow in our lives. I mean those
savings multiply. It's not just doubling it. It actually goes for
pounds because it's reverse compounding, so that savings is probably
(16:46):
more like closer to eleven thousand dollars, and you know
you're saving what probably four or five months off the
home loan.
Speaker 3 (16:52):
Again, that's exactly right, So just think every thousand dollars,
think five thousand, and think you know a few months
off the home loan, home loan.
Speaker 1 (17:00):
One who's listening right now? Can I just do a
quick shout out to two very powerful calculators. The one
is obviously on the Sugar Mama website. It is my
lump Summon extra payment or a calculat where you can
actually combine the two of increasing your mortgage payments after
doing a budget and making those extra ad hoc repayments,
you can see how the combination of the two how
much time and money they save you. And then of
course heading over to the Blue Lantern Financial Services website
(17:21):
because you have a rainbow of calculators that everyone can
use that actually demonstrate how much more money you can save,
and they're a really great source of motivation and empowerment
to really look at realistically paying off your mortgage as
soon as as possible. But it's not unrealistick to drop
your mortgage. I think from thirty years down to twenty
five years if you apply some of these principles we're
talking right now, would you agree with that?
Speaker 2 (17:41):
Absolutely?
Speaker 1 (17:42):
Yeah? All right. Next one, this is a really important
one because we all get very lazy and overwhelmed, and
that is shopping around for a better deal. Why do
you think we get do this? Like, I mean, I
just sort of answered the question of myself in my
personal opinion, But why do we just think assume that
we're on the best rate.
Speaker 3 (17:57):
I think apherently people want to think pop and they'd
like to think, yeah, sure, I'm sure that the bank,
wonderful institution or the lender is looking after me, and
I'm confident.
Speaker 2 (18:07):
Give loyalty exactly exactly.
Speaker 3 (18:11):
So there's that and two people you know have a
life and they think that it's boring. They think that
it's hard work to check in with their finances and
sometimes also it can be confronting as well. So putting
all that together, that's why people perhaps don't look at
it as much as they should. You don't have to
go crazy, you don't have to look at it every week.
That might be a bit too much. But I've had
clients who you can tell that they haven't really focused
(18:33):
on their finances for good two to three years, and
that's two to three years of interest that paid overs
for so and.
Speaker 1 (18:39):
It's funny, it's not until you do it, you know,
you realize, wow, I should have done this a long
time ago. I've wasted so much money and time and
it was really not that hard. And we'll come back
to that process, all right, shopping around for a better deal.
Do people really save money when they do this? You know,
is the time and the effort really worth it.
Speaker 3 (18:57):
I think the first thing to do is do your
own mortgage health check and go to your existing lender
and see if they'll come to the party with a
better rate. And then there's no there's really no work
involved at all. Right, if you're dealing direct with the bank,
you'll have to do that yourself. You have to wait
thirty minutes on the one, three hundred numbers or whatever.
If it's with US, we have software and systems that
(19:17):
get you those discounts without you doing anything. Okay, So
if you're still dealing direct with a bank, just just
know that seventy percent of loans are done through brokers
in Australia, So ask yourself why are you the three
out of ten people in Australia that are still going
direct to a bank.
Speaker 1 (19:31):
Okay, all right, let's talk about the savings now. You know,
even things like saving on an annual feed that can
be really beneficial as well. If you can negotiate like
that getting a twenty five basis points off your homeland.
People might think, O, well, that's hardly anything. But how
does that play out on the cash flow and how
does that pay out on paying off your home loan faster?
Speaker 2 (19:50):
Well? Can I answer that with an example?
Speaker 1 (19:52):
I love that?
Speaker 2 (19:53):
Think Okay, So I had.
Speaker 3 (19:54):
Clients who I got them their wonderful fixed rate, and
you know, unfortunately we're all coming off those wonderful fixed rates.
The lender, though with they offered them a decent rate,
but they said, look, can we do better? And I said, yeah,
I think you can. And so I was able to
get them a better rate. And at that time that
lender was offering no annual package fee, multiple offset accounts,
(20:15):
so their savings were including all of that were one
hundred and twelve dollars per month, and that over the
life of the loan, that will save them forty seven
thousand dollars Wow.
Speaker 1 (20:24):
Oh my goodness, they must have been cheering.
Speaker 3 (20:26):
They're not those sort of people. Maybe they just didn't
want to show me or internally they were cheering. Yeah,
but they were very happy, very happy.
Speaker 1 (20:34):
And it's huge. About forty seven thousand dollars is a
lot of money, and that money can be then used
for other valuable things in their lives.
Speaker 2 (20:42):
Yeah.
Speaker 3 (20:42):
Well, I'd help them build their new house, so you know,
every dollar was important. They still had a few things
to finish off. But also the addition to that is
they're very disciplined and they are people who do like
to have different buckets of money in different account They've
averaged around twelve thousand dollars savings across their multiple offset accounts,
so that save an addition another forty five thousand dollars
in interest over the life of the loan.
Speaker 1 (21:03):
On top of the forty seven the top of the
forty seven, So this is close to one hundred thousand
dollars in interest, that's right, being saved by getting vrasal
advice from a mortgage broker that they let's be honest,
they probably wouldn't have gotten necessarily from the bank.
Speaker 3 (21:16):
Well, they wouldn't know that that offer was out there, Yeah,
they wouldn't know.
Speaker 1 (21:19):
Yeah, my goodness. All right, So okay, these savings are
just compounding. All right. Let's move on to this concept
which I've seen a lot on social media and I'm
sort of on the fence with. But it's the concept
of paying your mortgage weekly instead of fortnightly or monthly.
What are your thoughts on this?
Speaker 2 (21:34):
Okay?
Speaker 3 (21:34):
Well, again, it's a it's all the pair of small
amounts of money. It doesn't make that big a difference.
So if you pay weekly on a five hundred thousand
dollars mortgage, the saving over the whole life of the
loan is seven hundred and forty eight dollars, okay, And
then on eight fifty thousand dollars loan, the saving is
one two hundred and seventy one dollars right over the
life of the loan, So that we're not getting those
that those big numbers that we're getting with the other ideas.
(21:58):
But again, if you do that in addition to everything else,
then it's all better off in your pocket than someone
else's exactly.
Speaker 1 (22:07):
So just making sure that you consistently stick to it.
Speaker 3 (22:09):
And there's another point on the weekly is that some people.
We go back to the importance of budgeting. Some people
just can work a budget better weekly rather than monthly,
so again that might tie in with that as well,
So that's an important point too.
Speaker 1 (22:24):
I completely agree with that. I run a budget and
cash flow academy program teaching people how to do a budget,
but how to stick to it. And you know, part
of the sticking to it is actually building the cash
flow system. And I say to people the key to
making your budget easy to stick to is to make
it consistent. So as many bills that you can take
that are irregular or even add hoc and make them
(22:44):
weekly for that le or monthly, the easier it is
to manage your cash flow and therefore stick to the budget.
The only reason why I sit on the fence a
bit with paying weekly versus monthly is if you're being
paid monthly, it can be a bit of a bit
off with the way the payday cycles fall if it's
coming out every Thursday, because they maybe five thursdays, you
(23:06):
know in your pay cycle, but you haven't been paid
yet and you can sort of run short of cash flow.
So it does need a lot more meticulous account keeping,
and that's where it can sometimes cause havoc for people
with their cash flow. But if you can pay weekly
and you have no problem handling that and managing that,
absolutely it's something you know definitely worthwhile doing, and those
savings add up every single year after year. All right,
think that The next one I want to talk to
(23:27):
you about is reviewing your progress. I mean, I love
the saying what gets monitored gets made. For Tom and
I are family, one of our big financial goalses here
is to try and make some inroads with our mortgage.
And for me, I know personally and professionally by checking
our mortgage on a regular basis, and I probably do
it more often than I should, but I know my
numbers and I can then see opportunities. Do you agree
(23:47):
with this, and what would you recommend people do to
help review their mortgage and how can we justify the
time to see those savings?
Speaker 3 (23:53):
Firstly, just ask yourself some key questions. You know, is
the rate that I'm getting the best rate at the moment? Okay, Now,
whether you want to answer that yourself, we'll get a
broker to help you with that. That's personal preference. Within
that then is it worth changing? And there's a question
around there around does the loan still still meet your needs? Then,
as part of that review process, back to motivation and
(24:15):
back to positive I'm a big believer in positive reinforcement.
Is okay, look back, how much extra have you paid
on your loan and understand what the benefit of that is.
How much have you been able to keep it an
offset account, and then understand the benefit, Because if you
understand the benefit and the savings, then that should give
you motivation to continue doing it.
Speaker 1 (24:33):
Yeah, absolutely all right. Then finally talking about the concept
of an investment property. This is something you mentioned and
I hadn't actually ever thought about this before. How can
we include the idea of property and building wealth and
save off our home loans at the same time.
Speaker 3 (24:48):
So all the ideas we've talked about prior to this
one are progressive mortgage management type ideas, whereas if you
have the ability to buy an investment property, and if
that investment property does a pre ciate with capital growth,
then it can be a real game changer. So think
about buying an investment property. It could be negatively geared,
which means you could get a tax return which then
(25:08):
could go on your personal mortgage. Again, that's something yet
to talk to your accountant about a lot of people
understand that principle. So again that's giving you that ad
hoc more progressive saving. But then the real game changer
is in ten twenty years, if that property increases in value,
then your strategy could be Okay, I'll realize the profits
and have that lump summon, then apply it to my mortgage,
(25:30):
and then you could be debt free earlier rather than
the twenty five to thirty years.
Speaker 1 (25:35):
Wow, that's quite incredible.
Speaker 3 (25:36):
So just on that, I had a client who was
looking to upgrade, and when I looked at their numbers,
I said, look, you can buy your next place and
still keep this one because at that time the market
wasn't great, so they had a good buying opportunity, but
then a selling opportunity in that same market wasn't great.
And also the other thing by getting them their new
home and keeping their home as an investment property, what
(25:58):
that allowed them to do avoid bridging finance, which was
expensive as well. By holding on to one of their
properties and then selling it when the market conditions were better,
they've been able to pay a further one hundred and
twelve thousand dollars off their loan and they're better off
by that number compared to if they just upgrade it
all in the same market.
Speaker 1 (26:18):
Oh my goodness. All right, Okay, so these are fairly
complicated strategies. You really do need to get not just
advice on, but you need experience absolutely and professional advice.
Speaker 2 (26:28):
Absolutely.
Speaker 1 (26:29):
I wouldn't be you know, you need to see someone
who's a personally. They've done it themselves as mortgage broker
has done this multiple times for their clients, and those
the intricacies and how to set this up correctly the
first time, the right way exactly. All right, Look, just
to quickly recap because this has been I mean, I
think we've probably got at least I think if my head,
I've worked out aout at least two hundred thousand dollars
worth of savings from this one episode off your home loan.
(26:50):
If you can apply this straight away, apply it consistently
and even dare I say build upon this this time
and savings potential explodes. And I've never someone who ever
regretted paying off their home loan sooner and faster. So
just to go a quick recap for everyone who was
listening to this episode. Number one, please go and do
a budget. If you want Joss Bank statement access where
(27:11):
you can have his program, look at your budget and
look at where you can potentially save money, and of
course take him up on that offer for a free
mortgage health check. I will be making sure I put
John's contact details, both his email address and his phone numbers.
You can pick up the phone and have a conversation
with him about your home loan. But promise me this,
you will go and do a budget. You will see
what extra payments you can and of course jump on
(27:31):
the Blue Lanterns website, look at their calculators, look at
the sugarmumb calculators and see the impact of those savings,
and of course make sure you apply those savings by
increasing your automatic mortgage repayments by that exact amount so
that those savings don't get spent elsewhere. Of course number
two is to look at a redraw facility or an
offset account. What savings do you have floating around an
online savings account that would be better off sitting in
(27:53):
an offset account or a redraw facility. Again, a good
quality mortgage broker will help set this up for you
so that this is working to your financial advantage. Number
three is look at ad hoc repayments. I use a
very simple example of the average Australian getting about two
and a half thousand dollars per year back is a
tax refund. You could go and spend that two and
a half thousand dollars, or if you wanted to, you
could put one thousand or even two thousand onto your
(28:14):
home loan, and the savings really are substantial. As John
has just explained, every one thousand dollars put as an
ad hoc repayment represents potentially up to five thousand dollars
in savings, So it's really literally like almost like a
risk free gambling if you like. Of course, Number four
is shopping around for a better deal. Do not let
yourself become a victim of loyalty tax, Do not get lazy,
(28:37):
do not get complacent, and don't feel overwhelmed. Refinancing is
actually very smooth, very simple, and this is why mortgage
brokers get paid by the banks because they do all
the hard work for you.
Speaker 2 (28:48):
Either.
Speaker 1 (28:48):
The biggest thing that people say to me when they've
spoken to Adam or to Joe or to John is
thank you so much. I can't believe how much they
were able to save us. We can't believe they feel
like they've almost like won the lottery. So shop around
for a debt of bill. Please don't ever settle, Please
don't ever be complacent about this. I would rather the
money be in your pocket rather than the banks, even
though I am a bank shareholder. Number five is to
(29:10):
consider if you can weekly repayments instead of fortnightly or monthly.
These may seem like small savings, but if you're in
a really tight budget and you can't make those extra repayments,
you can't make ad hoc repayments. You already have the
redoor facilities set up for emergency money and stuff like that.
This is a really simple way of not having to
find any extra money, but actually being able to save
a lot of money. And again those that interest savings
(29:31):
of seven hundred and forty eight dollars per year is substantial,
especially over the course of a thirty year loan. And
number six is obviously reviewing your mortgage repayments as I
have shared with you guys, and I sound a little
bit OCD and judge me if you like, but I'm seeing,
for once our mortgage coming down at a faster rate
I'm seeing our emergency money building up, but what gets
monitored gets made. I would truly believe that it is
(29:52):
so exciting when you see the actual cost of your
interest repayment getting taken out of the bank slowly reducing.
That is true savings in your pocket that hasn't in
nuts involved you necessarily having to sacrifice. I haven't had
to give up my gym membership or subscriptions or you know,
my monthly uber eats by making a simple change in
the way that you manage your cash phone. Of course,
I will link in the podcast notes the Sugar Mamma
Budget and cash Hood Academy if you want to learn
(30:12):
how to do a budget and stick to it. Number
seven is looking at an investment property, and this is
obviously not available for absolutely everyone because on everyone has
an investment property, but there may be other assets around
you that can be sold off, such as a share
pot follower and then reorganized into a debt recycling strategy
to help you save tens, if not hundreds of thousands
of dollars off your home loan and debt recycling strategy
is a very powerful one. I will definitely make more
(30:34):
episodes around this, but for the right people at the
right time, using the physical the right reasons. Yes, it
can save you a substantial amount of money off your
home loan, but also allow you to build wealth outside
of the family home. So these are really important things
that you need to be listening to and thinking about
and applying in your life. And of course, if you
are feeling stuck, if you are overly overwhelmed, don't use
this as a block and not do anything. Pick up
(30:54):
the phone, give John a call, ask him about what
he can do for you, give me your details, let
him on some numbers. It costs you absolutely nothing, and
you have so much to gain, all right, John, Sorry
I took a little bit passionate there. Thank you so
much for coming on to show I really appreciate it.
This has been such a powerful and valuable list. And
there are other things, of course beyond these seven things,
but I'll let you share those insights and ideas with
(31:16):
people that maybe you perhaps want to reach out and
speak to you. If they want to speak to you directly,
of course, your contact details will be linked below, including
obviously if they want to get access to the bank statements.
Speaker 3 (31:26):
Sure so, email or phone either is fine. Text me
on the way you know, you know, if you're on
the bus. Just obviously a bit of background as to
you know, how you got my number and you know random.
Speaker 2 (31:38):
Yeah, so you'll find my.
Speaker 3 (31:40):
Colleagues and myself are very approachable and yeah, we just
want to help.
Speaker 1 (31:43):
And just to reiterrect to everyone listening, I have absolutely
zero connection with blue Land and get asked all the
time who do I recommend? Who do I like? Who
do I trust? And I'm not going to recommend someone
I don't know that I haven't worked with, and I
haven't seen for myself how they work. And as I said,
you know, blue Lands look after myself, my family members,
and my friends, and I've only ever had amazing feedback.
I get zero benefit from doing this other than the
(32:04):
fact that I get to sleep at night knowing that
you're in really good hands with someone who's reliable, honest, transparent,
and he's bloody good at their job. All right, everyone,
thank you so much for listening today's episode on Sugarmuma's Fireplay.
If you enjoyed this episode, please make sure you go
and send it to your friends, send it to your
partner if you have one, send it to your family members,
because I really want to help Australians get their mortgages down,
(32:25):
actually see that they are powerful and capable of doing
this for themselves. And of course it doesn't actually take
too much effort to start to see a shift, a
breakthrough as those mortgage repayments reduce, those interest costs come down,
and you actually see that you're making substantial headway and
saying goodbye to that thirty year prescription made by your
bank and hello to fifteen, ten or even five years
(32:46):
mortgage terms. How good would that be? All possible when
you apply financial literacy to your financial situation, of course,
including all of those important valuable goals and trips. Thank
you everyone for listening to Sugarmuma's fireplay. In the meantime,
keep that financial fire burning Bright Chapel
Good morning, everyone, and welcome back to another episode of
Sugar Mumma's Fireplay. I am your host's financial planner, Canna Campbell,
and today I want to waste no time at all
because we're talking about your mortgage, and we're going to
talk about seven different ideas for you to apply right
now today for your mortgage so that you can save
valuable time and money. And I'm not talking about small
(00:20):
dollars here or silly amounts of time. I'm talking tens,
if not maybe hundreds of thousands of dollars and shaving
years off your home loan. This is something I'm really
serious about you understanding how your mortgage works and the
things that you can actually do that are really not
that hard to save you so much time and money.
And of course, the moment that mortgage is paid off, woohoo,
(00:40):
there are so many other tools that we can start
playing with to build wealth outside of your home. Of course,
now to help us break down all these ideas, these
very powerful ideas, these practical ideas, these simple ideas, I
am joined by John Micklzzi from blue Land and Financial Services.
As you know, we've previously had Adam McCabe in the
studio plenty of and I decided to mix things up because
(01:02):
Blue Lantern is actually who I recommend for mortgage brokers.
I get zero benefit from doing this. I'm just happy
to share contacts of people that I know and trust,
but more importantly, people that I have worked with for
tens of years and actually do my own personal mortgage
broking and investment loans, as well as my family members
and all of my friends. So if at any time
(01:22):
you think you know what, I need to speak to
these guys. They sound really good. They are, and of
course I will link all the contact details in the
podcast notes so you can quickly and easily connect with
them whenever you feel ready. Now a quick reminder, of course,
all of these podcasts are general in nature and for
educational purposes only. All right, now that we've got that
important compliance requirement out of the way, let's hit the
(01:42):
ground running. John, good morning. Thank you for coming into
the studio and to talk about this. And I'm so
serious about Australian's realing what they can do with their
home loans to actually get the monkey off their back.
(02:02):
Do you agree that we need to be paying more
attention to our homelands?
Speaker 2 (02:06):
Absolutely? And I could not agree with you more, Kenna.
Speaker 1 (02:08):
We have a great calculator on the sugar Mumba website.
It's an extra repayment calculator at a combined lumpsung. You
just simply plug in your details and see what an
extra fifty dollars per month, plus say an extra thousand
dollars bonus each year on your homelan doesn't see the
term drop and see the amount of savings add up.
And of course that's subject to interest rates remaining the
same and of course making sure you don't draw that
(02:30):
money back out again. But you have a choice, and
you really can actually pay off the whole mortgage so
much faster. You are not dictated by the bank or
your lender. But look, let's get cracking because we've got
seven ideas that we want to break down together as
to how to pay off your home loan off as
quickly as possible. Before we begin, I'm just sorry, I
just don't want to hit the gray money. Can you
just give everyone the quick introductionist to who you are,
(02:51):
because obviously everyone's used to hearing Adam on the show.
Can you explain to everyone what you do and how
you fit in at Blue Lantern.
Speaker 2 (02:56):
Sure, So there's a few brokers at Lantern. I'm Johnny.
Speaker 3 (03:00):
Let's see on one of the team, and so we
bread the workout evenly between the team, depending on a speciality,
depending on who's available, depending on you know, where that
client has come from. So there's always good coverage for
anyone that wants to come and have a chat with us,
do a mortgage health check, get ready for a purchase.
So briefly, that's my work splits into two. So it's
either helping people purchase the property, but then importantly staying
(03:22):
with them after that, you know, working with them through
the life of the loan to ensure that you know,
they are trying to minimize interest costs and they are
getting to total home ownership or at least comfortable levels
of debt as soon as possible.
Speaker 1 (03:33):
That ongoing service is completely underestimated. And I say that
because I know how much I rely on Blue Land
and to review my home loan, to call the bank
on my behalf and negotiate a better interest rate, you know,
when it's time to refinance, because the bank won't match
what they're paying new customers or what the competitive rate is.
And that guidance as to how to actually structure the
loans in the right way, because there are lots of
ways to pay your home loft and lots of different
(03:55):
ways that suit different people in different situations or different
periods of their lives. So that ongoing service is actually free,
isn't it.
Speaker 3 (04:01):
That's exactly right, And I'll go into more detail about
this later.
Speaker 2 (04:05):
Because of our business model, not all brokes are the same.
Speaker 3 (04:07):
We are compelled, you know, to look after you and
to give you options and to make sure that everything's
working well for you. And this is no disrespect to
banks because obviously we do source funding from banks. We've
work with them, we work with them, but they are
not compelled to do anything. They only have to explain
their products and services.
Speaker 2 (04:23):
That's it.
Speaker 1 (04:24):
Look for anyone who is a mortgage right now, they've
never had any ongoing relationship in helping power their bank.
Can this be your sign to pick up the phone
and find a good quality mortgage broker that's going to
work with you. And you know, the way I would
describe what you guys do is you're almost like a coach.
And look, Adam has always done our home loans and
investment loans, and I have him on speed dial, and
it makes it makes the difference because you do make
(04:46):
greater inroads and you make better progress and you tick
those goals off. So all right, let's get started. Number one.
The first thing to do, and when it comes to
trying to pay for your home loan as quickly as
possible is to do a budget. But can you explain
why and how effective this is?
Speaker 3 (05:00):
Certainly, so to try and determine, okay, where could you
make savings and where can you make inroads? You've got
to understand what your current expenditure is and try to
categorize it. To think about categories such as your mortgagey payments.
Obviously that's the first start, but then things like utilities, rates, insurances, communications, expenditure,
so those things that you might think, okay, well they're
(05:22):
sort of fixed in nature. And then there's other categories
such as groceries, eating out, recreation, entertainment, which are more discretionary, right.
Speaker 1 (05:30):
And't mentalize these expenses exactly, so you can sort of
focus purely on looking at the utilities expenses, the gas, electricity,
the water, see what you can't really do too much with.
And then obviously look at the groceries, alcohol, you know,
those other inns absolutely which are more volatile or fluctuate.
Speaker 2 (05:47):
Yeah.
Speaker 3 (05:47):
So I have people who say, oh, you know, my
credit card bill is three thousand dollars a month, so
that's my expenses. But that's just to have one number.
It's hard to make inroads into it unless you break
down that number and see, okay, where can I perhaps
improve what can't be improved, So.
Speaker 1 (06:01):
You've got to do a deep dive. Yes, I completely agree. Now,
you and I were chatting on the phone and we
were talking about this thing called bank statements dot com
and you've given me example, and I have to say
it's quite fascinating because it basically is a software system
that breaks down and does all that. It's almost like
an AI of budgeting because it breaks down, it compartmentalizes
everything for you so you don't need to do it yourself.
So then you can then look at each individual category
(06:22):
and see what needs to be cut down or cut out.
Can you explain how you use this to help clients
and also how does someone get their hands on this,
because it's extremely helpful.
Speaker 3 (06:31):
So when I do a mortgage, health check, or a
brief finance or even a purchase. Part of that process
is understanding living expenses. And then when it comes to
getting data from people, so for example, credit card statements,
personal loan statements, home loan statements, we have this service
whereby it's automated, it's secure, where the statements come directly
(06:51):
to us. And then importantly with that comes an analysis
of expenses. Okay, And that's important because someone might say, oh, yeah,
we spend you know, three hundred dollars on recreation and entertainment.
Then the data says, well, it's one thousand dollars, right,
and there's no wrong or right answer. But then it's
a conversation to say, do you want to limit your
recreation attainment to three hundred or is it actually one
(07:12):
thousand dollars a month?
Speaker 2 (07:14):
And you don't want that to change?
Speaker 3 (07:15):
Okay, So that's just a conversations awareness.
Speaker 2 (07:19):
It creates awareness.
Speaker 3 (07:20):
You hear stories in the media about, you know, the
bank look through my expenses and they questioned why I
was going to McDonald's every week.
Speaker 2 (07:27):
I don't care. You know, maybe invite me longto McDonald's.
I don't know. But it's not a deep dive.
Speaker 3 (07:32):
I don't go into what you're spending on where it's
more the headline numbers. If you want to, if you
want the data to go in and perhaps look where
you can improve, fine, I'll give it to you. But
it's not a deep dive exercise for me into too
far down. And there's no judgment in the process at all.
Speaker 1 (07:49):
Oh gosh. I mean you and I both know there's
no judgment where it comes to people's personal finances. You know,
everyone has their own personal value system, and for us,
at really the end of the days, we're there to help.
So if someone comes from saying we need help, we'll
look at it with a view to help, not to
of you to judge. And I mean, look, I've got
an example in front of you right now that you've
given me, and I have to say it's brilliant because
immediately my eye went to certain expenses. I was like,
(08:09):
oh wow, you know you could actually make an extra
eighty dollars per month for repayment just by looking at
this one particular expense. It really does break it down.
So I mean, I'll put for everyone that's listening right now,
obviously John's contact details, but I believe you're happy to
give some people access.
Speaker 2 (08:23):
To this as part of a mortgage health check.
Speaker 1 (08:26):
As part of the mortgage health check. So, I mean,
what a brilliant opportunity for everyone to get a great
refresh of their budget through this amazing service and get
some help from you. So all right, Realistically, people think, oh,
a budget, it's like doing going to the dentist. You
don't want to do it, you procrastinate. But the smallest savings,
this particularly a regular basis on a mortgage, can actually
save you thousands of dollars exactly. Can you give us
(08:47):
a couple of realistic examples to how much you know,
some you know, say one hundred and fifty dollars per
month that you might find from your budget when applied
to making an extra repayment on your homeland. How much
really are we talking about? Because I feel like when
people hear that how much, they'll say they'll want to
go do their budget immediately. So can you give us
an example, a realistic example as to how much someone
(09:08):
can save from a time point of view and from
an interest point of view by doing their budget and
fighting say an extra hundred dollars or extra fifty dollars
or an extra hundred and fifty dollars per month that
they can apply to their homelan.
Speaker 2 (09:18):
Sure.
Speaker 3 (09:19):
I call it the power of small amounts of money,
and it shouldn't be sneezed at. So I will do
it on an annual basis. So that way, maybe that's
even that's more achievable for someone. If someone puts a
thousand dollars extra on their home loaner per year, yeah,
per year, right, that thousand dollars saves five thousand dollars
in interest.
Speaker 1 (09:35):
Wow, so that's not even one hundred dollars per month,
that's right. What are we using as an average mortgage
size here?
Speaker 3 (09:40):
So that's for a five hundred thousand dollars average mortgage size.
Even up to eight point fifty, the saving is a
little bit more. But just think in rough terms, one
thousand dollars on five thousand dollars off in interest.
Speaker 1 (09:53):
That is amazing.
Speaker 2 (09:54):
And what's the average interest rate you're using that I'm
using six point one five.
Speaker 1 (09:57):
Six point one five, okay, so that's a pretty competitive rate.
That's computer greedy in these numbers. So essentially it's like
that one thousand dollars savings gives you back an additional
four thousand dollars in total, that's.
Speaker 3 (10:10):
Right, and the average time, so think about it takes
two to three months off your loan.
Speaker 2 (10:16):
Wow.
Speaker 3 (10:16):
Okay, so then again you do that every year, and
then you're starting to get into not months, but potentially
years at the end of the mortgage.
Speaker 1 (10:23):
Well if you feel most people are on a thirty
year mortgage. So if it's shaving two months off each
time you do this, it adds up very very quickly.
And also, as I said, like, that's what eight hundred
and eighty dollars a month extra pay, not even twenty
dollars a week, that's right. And if that is not
a bigger motivation to go and do a budget or
get a health check done by you and get an
AI program to do your budget, I don't know what
(10:45):
is all right? Next idea, let's talk about redraw facilities
and offset accounts. Okay, how do they work? And how
can I everyone listening right now use that to their
advantage to save tens of thousand dollars for their homeland.
Speaker 3 (10:56):
Sure, so whether you use a redrawal facility or offset
it has the same effect that simple.
Speaker 1 (11:00):
Okay, Can we explain the difference for everyone right now
between the two.
Speaker 3 (11:03):
So that one thousand dollars we're talking about, you can
pay that off your loan right and then if it
has a redraw of facility, you can get that back
if you need it.
Speaker 2 (11:13):
The discipline is not not getting touched. It's not to.
Speaker 3 (11:15):
Touch it, okay, but at least whilst it's in there,
it's saving you money. So you will literally see if
you put one thousand dollars in, if your mortgage is
eight fifty, it will come down to eight forty nine, okay,
So you will see the difference.
Speaker 1 (11:26):
And you'll low to be charged the interest on the
eight four nine exactly exactly.
Speaker 2 (11:30):
Cotant part exactly.
Speaker 3 (11:31):
Now, if you put one thousand dollars in an offset account,
same thing, same effect, So that.
Speaker 1 (11:36):
Since they're almost looking like savings in the offset account,
that's right, like it literally looks like an online savings account,
that's right link to all you accounts, but it's actually
offsetting the interest. So instead of the bank charging you
interest on eight hundred and fifty thousand, it's charging your
interests on eight hundred and forty nine exactly, okay, exactly
out of interest. Which do you prefer?
Speaker 3 (11:54):
I prefer offset accounts? Personal choice just like the flexibility
of having the money there. And also there are investment
properties in play, and therefore I don't want to put
money on the loan because I need the funds, and
I don't because once you put money on into investment loan,
you can't redraw it back without affecting your accounting.
Speaker 1 (12:14):
Can you give us an example of, you know, for example,
emergency money. I tell everybody you need to have emergency money,
and you need to have the right emergency money. And
I say to people, you know, if you can keep
your emergency money in either your offset account or a
redraw facility, how much does that save people in time
and money? Using those same examples of say it, I
think a six to fifty mortgage, or sorry, five hundred
(12:34):
thousand dollar mortgage, an eight hundred thousand dollars mortgage.
Speaker 2 (12:38):
Okay, So let's use the figure of ten thousand dollars. Okay.
Speaker 3 (12:42):
So let's just say you have been able to save
ten thousand dollars and that's your emergency funds, yes, okay,
And let's say you put them in an offset account.
Speaker 2 (12:51):
Okay. So on an eight fifty loan.
Speaker 3 (12:54):
The savings are over the life of the loan, fifty
one thousand dollars will be paid nine months.
Speaker 1 (13:01):
Earlier, assuming you don't take my emergency money out. Yes,
that is huge, fifty one thousand dollars. So just in
our first two tips alone, you know we've saved what
five thousand dollars by making an extra one thousand dollars
zero in payments each year yep, and then an extra
fifty one thousand dollars by using a redraw facility or
(13:23):
an offset account. Anyone that's listening to this episode right
now that has emergency money sitting in an online savings
account that's not connected to your home loan, please consider
getting some advice, obviously from John or from you know,
your own mortgage broker, about the best way to structure
is look into a redraw facility or an offset account.
(13:44):
And most of these facilities are free. They're part of
your loan package anyway.
Speaker 3 (13:48):
Some banks charge a package fee. Some banks don't charge
a package fee at all, but they still give you
an offset account. Then you can get really creative. Some people,
rightly or wrongly, they may not have the discipline. They
may have a certain way of banking, and for those clients,
if everything else matches up, for them, I suggest a
lender that has multiple offset accounts, so they can have
one account for the emergency funds where they don't have
(14:09):
to touch where it's they don't have to do the
everyday banking, and then they have other accounts that they
use for every day banking. And on that basis, that's
excellent because every dollar in every account every day is
offsetting against the loan.
Speaker 1 (14:20):
This is a little insight. My preference is actually a
redraw facility, So our emergency money systs in a redraw facility.
I actually just checked it this morning and it's slowly
getting back up there again. But we do have multiple
offset accounts for our other smaller goals, like we're saving
up to renovate our kitchen, we are saving up to
take the kids skiing overseas in June, So we have
(14:41):
those little smaller accounts bubbling away that are at least
offsetting the interest on other loans as well. So it
really is that combination is equally as powerful, but incredibly
effective and in saving you all the time. And I
love as a great source of motivation is that when
we pay our mortgage, I think around the twenty six
of every month and a couple ofdays later, I'll log
into my intet banking and look at the interest repayment
(15:03):
dropping and seeing that we're making a bigger, better progress
with that deduction.
Speaker 3 (15:07):
Everyone has their own motivation. I think it's important to
find your own motivation. Everyone has their own personal preferences. Yeah,
I've used redrawer in the past for different reasons. As again,
it's just my that's my personal preference, and it's about
finding what works works for you.
Speaker 1 (15:20):
All right, let's keep these savings bubbling long for our listeners.
So number three making ad hoc repayments. So you know
a lot, I know everyone's on a really tape budget.
They're like, where are we going to come up with
some extra ad hoc money? Well, you know, taking on
extra work. Perhaps you might get a tax refund. You know,
you might do a side hustle, you might declutter your home.
You know, gosh, my kids stayed to outgrow. They're all
(15:40):
going through gross spurts. And I've got so many things
that I could just list onto gum Tree or Facebook marketplace.
You know, even just an extra like one thousand dollars
can have an incredible effect. So we just quickly talk
about the power of ad hoc repayments.
Speaker 3 (15:52):
Yeah, so ad hoc repayments I think, if they can
be achieved, you know, are excellent because that's where you
really start eating into your mortgage.
Speaker 2 (16:01):
Right. The savings tips, yeah, they can be done.
Speaker 3 (16:02):
But the extra the ad hoc then again, you know
we're getting back to that. If you can find a
thousand dollars savings, and even if you find that extra
thousand dollars in income or cash or or whatever, again,
every one thousand dollars is a five thousand dollars saving.
Speaker 1 (16:17):
Wow. Did you know that the average Australian gets back
about two and a half thousand dollars per annum as
a tax return.
Speaker 2 (16:23):
No, I was not aware of that.
Speaker 1 (16:24):
So if we were to insteader of put one thousand
dollars onto the homelan, we put two and a half
thousand dollars, or even to say, let's say we take
put two thousand on the home loan and keep five
hundred for ourselves to keep a bit of you know,
I guess financial flow in our lives. I mean those
savings multiply. It's not just doubling it. It actually goes for
pounds because it's reverse compounding, so that savings is probably
(16:46):
more like closer to eleven thousand dollars, and you know
you're saving what probably four or five months off the
home loan.
Speaker 3 (16:52):
Again, that's exactly right, So just think every thousand dollars,
think five thousand, and think you know a few months
off the home loan, home loan.
Speaker 1 (17:00):
One who's listening right now? Can I just do a
quick shout out to two very powerful calculators. The one
is obviously on the Sugar Mama website. It is my
lump Summon extra payment or a calculat where you can
actually combine the two of increasing your mortgage payments after
doing a budget and making those extra ad hoc repayments,
you can see how the combination of the two how
much time and money they save you. And then of
course heading over to the Blue Lantern Financial Services website
(17:21):
because you have a rainbow of calculators that everyone can
use that actually demonstrate how much more money you can save,
and they're a really great source of motivation and empowerment
to really look at realistically paying off your mortgage as
soon as as possible. But it's not unrealistick to drop
your mortgage. I think from thirty years down to twenty
five years if you apply some of these principles we're
talking right now, would you agree with that?
Speaker 2 (17:41):
Absolutely?
Speaker 1 (17:42):
Yeah? All right. Next one, this is a really important
one because we all get very lazy and overwhelmed, and
that is shopping around for a better deal. Why do
you think we get do this? Like, I mean, I
just sort of answered the question of myself in my
personal opinion, But why do we just think assume that
we're on the best rate.
Speaker 3 (17:57):
I think apherently people want to think pop and they'd
like to think, yeah, sure, I'm sure that the bank,
wonderful institution or the lender is looking after me, and
I'm confident.
Speaker 2 (18:07):
Give loyalty exactly exactly.
Speaker 3 (18:11):
So there's that and two people you know have a
life and they think that it's boring. They think that
it's hard work to check in with their finances and
sometimes also it can be confronting as well. So putting
all that together, that's why people perhaps don't look at
it as much as they should. You don't have to
go crazy, you don't have to look at it every week.
That might be a bit too much. But I've had
clients who you can tell that they haven't really focused
(18:33):
on their finances for good two to three years, and
that's two to three years of interest that paid overs
for so and.
Speaker 1 (18:39):
It's funny, it's not until you do it, you know,
you realize, wow, I should have done this a long
time ago. I've wasted so much money and time and
it was really not that hard. And we'll come back
to that process, all right, shopping around for a better deal.
Do people really save money when they do this? You know,
is the time and the effort really worth it.
Speaker 3 (18:57):
I think the first thing to do is do your
own mortgage health check and go to your existing lender
and see if they'll come to the party with a
better rate. And then there's no there's really no work
involved at all. Right, if you're dealing direct with the bank,
you'll have to do that yourself. You have to wait
thirty minutes on the one, three hundred numbers or whatever.
If it's with US, we have software and systems that
(19:17):
get you those discounts without you doing anything. Okay, So
if you're still dealing direct with a bank, just just
know that seventy percent of loans are done through brokers
in Australia, So ask yourself why are you the three
out of ten people in Australia that are still going
direct to a bank.
Speaker 1 (19:31):
Okay, all right, let's talk about the savings now. You know,
even things like saving on an annual feed that can
be really beneficial as well. If you can negotiate like
that getting a twenty five basis points off your homeland.
People might think, O, well, that's hardly anything. But how
does that play out on the cash flow and how
does that pay out on paying off your home loan faster?
Speaker 2 (19:50):
Well? Can I answer that with an example?
Speaker 1 (19:52):
I love that?
Speaker 2 (19:53):
Think Okay, So I had.
Speaker 3 (19:54):
Clients who I got them their wonderful fixed rate, and
you know, unfortunately we're all coming off those wonderful fixed rates.
The lender, though with they offered them a decent rate,
but they said, look, can we do better? And I said, yeah,
I think you can. And so I was able to
get them a better rate. And at that time that
lender was offering no annual package fee, multiple offset accounts,
(20:15):
so their savings were including all of that were one
hundred and twelve dollars per month, and that over the
life of the loan, that will save them forty seven
thousand dollars Wow.
Speaker 1 (20:24):
Oh my goodness, they must have been cheering.
Speaker 3 (20:26):
They're not those sort of people. Maybe they just didn't
want to show me or internally they were cheering. Yeah,
but they were very happy, very happy.
Speaker 1 (20:34):
And it's huge. About forty seven thousand dollars is a
lot of money, and that money can be then used
for other valuable things in their lives.
Speaker 2 (20:42):
Yeah.
Speaker 3 (20:42):
Well, I'd help them build their new house, so you know,
every dollar was important. They still had a few things
to finish off. But also the addition to that is
they're very disciplined and they are people who do like
to have different buckets of money in different account They've
averaged around twelve thousand dollars savings across their multiple offset accounts,
so that save an addition another forty five thousand dollars
in interest over the life of the loan.
Speaker 1 (21:03):
On top of the forty seven the top of the
forty seven, So this is close to one hundred thousand
dollars in interest, that's right, being saved by getting vrasal
advice from a mortgage broker that they let's be honest,
they probably wouldn't have gotten necessarily from the bank.
Speaker 3 (21:16):
Well, they wouldn't know that that offer was out there, Yeah,
they wouldn't know.
Speaker 1 (21:19):
Yeah, my goodness. All right, So okay, these savings are
just compounding. All right. Let's move on to this concept
which I've seen a lot on social media and I'm
sort of on the fence with. But it's the concept
of paying your mortgage weekly instead of fortnightly or monthly.
What are your thoughts on this?
Speaker 2 (21:34):
Okay?
Speaker 3 (21:34):
Well, again, it's a it's all the pair of small
amounts of money. It doesn't make that big a difference.
So if you pay weekly on a five hundred thousand
dollars mortgage, the saving over the whole life of the
loan is seven hundred and forty eight dollars, okay, And
then on eight fifty thousand dollars loan, the saving is
one two hundred and seventy one dollars right over the
life of the loan, So that we're not getting those
that those big numbers that we're getting with the other ideas.
(21:58):
But again, if you do that in addition to everything else,
then it's all better off in your pocket than someone
else's exactly.
Speaker 1 (22:07):
So just making sure that you consistently stick to it.
Speaker 3 (22:09):
And there's another point on the weekly is that some people.
We go back to the importance of budgeting. Some people
just can work a budget better weekly rather than monthly,
so again that might tie in with that as well,
So that's an important point too.
Speaker 1 (22:24):
I completely agree with that. I run a budget and
cash flow academy program teaching people how to do a budget,
but how to stick to it. And you know, part
of the sticking to it is actually building the cash
flow system. And I say to people the key to
making your budget easy to stick to is to make
it consistent. So as many bills that you can take
that are irregular or even add hoc and make them
(22:44):
weekly for that le or monthly, the easier it is
to manage your cash flow and therefore stick to the budget.
The only reason why I sit on the fence a
bit with paying weekly versus monthly is if you're being
paid monthly, it can be a bit of a bit
off with the way the payday cycles fall if it's
coming out every Thursday, because they maybe five thursdays, you
(23:06):
know in your pay cycle, but you haven't been paid
yet and you can sort of run short of cash flow.
So it does need a lot more meticulous account keeping,
and that's where it can sometimes cause havoc for people
with their cash flow. But if you can pay weekly
and you have no problem handling that and managing that,
absolutely it's something you know definitely worthwhile doing, and those
savings add up every single year after year. All right,
think that The next one I want to talk to
(23:27):
you about is reviewing your progress. I mean, I love
the saying what gets monitored gets made. For Tom and
I are family, one of our big financial goalses here
is to try and make some inroads with our mortgage.
And for me, I know personally and professionally by checking
our mortgage on a regular basis, and I probably do
it more often than I should, but I know my
numbers and I can then see opportunities. Do you agree
(23:47):
with this, and what would you recommend people do to
help review their mortgage and how can we justify the
time to see those savings?
Speaker 3 (23:53):
Firstly, just ask yourself some key questions. You know, is
the rate that I'm getting the best rate at the moment? Okay, Now,
whether you want to answer that yourself, we'll get a
broker to help you with that. That's personal preference. Within
that then is it worth changing? And there's a question
around there around does the loan still still meet your needs? Then,
as part of that review process, back to motivation and
(24:15):
back to positive I'm a big believer in positive reinforcement.
Is okay, look back, how much extra have you paid
on your loan and understand what the benefit of that is.
How much have you been able to keep it an
offset account, and then understand the benefit, Because if you
understand the benefit and the savings, then that should give
you motivation to continue doing it.
Speaker 1 (24:33):
Yeah, absolutely all right. Then finally talking about the concept
of an investment property. This is something you mentioned and
I hadn't actually ever thought about this before. How can
we include the idea of property and building wealth and
save off our home loans at the same time.
Speaker 3 (24:48):
So all the ideas we've talked about prior to this
one are progressive mortgage management type ideas, whereas if you
have the ability to buy an investment property, and if
that investment property does a pre ciate with capital growth,
then it can be a real game changer. So think
about buying an investment property. It could be negatively geared,
which means you could get a tax return which then
(25:08):
could go on your personal mortgage. Again, that's something yet
to talk to your accountant about a lot of people
understand that principle. So again that's giving you that ad
hoc more progressive saving. But then the real game changer
is in ten twenty years, if that property increases in value,
then your strategy could be Okay, I'll realize the profits
and have that lump summon, then apply it to my mortgage,
(25:30):
and then you could be debt free earlier rather than
the twenty five to thirty years.
Speaker 1 (25:35):
Wow, that's quite incredible.
Speaker 3 (25:36):
So just on that, I had a client who was
looking to upgrade, and when I looked at their numbers,
I said, look, you can buy your next place and
still keep this one because at that time the market
wasn't great, so they had a good buying opportunity, but
then a selling opportunity in that same market wasn't great.
And also the other thing by getting them their new
home and keeping their home as an investment property, what
(25:58):
that allowed them to do avoid bridging finance, which was
expensive as well. By holding on to one of their
properties and then selling it when the market conditions were better,
they've been able to pay a further one hundred and
twelve thousand dollars off their loan and they're better off
by that number compared to if they just upgrade it
all in the same market.
Speaker 1 (26:18):
Oh my goodness. All right, Okay, so these are fairly
complicated strategies. You really do need to get not just
advice on, but you need experience absolutely and professional advice.
Speaker 2 (26:28):
Absolutely.
Speaker 1 (26:29):
I wouldn't be you know, you need to see someone
who's a personally. They've done it themselves as mortgage broker
has done this multiple times for their clients, and those
the intricacies and how to set this up correctly the
first time, the right way exactly. All right, Look, just
to quickly recap because this has been I mean, I
think we've probably got at least I think if my head,
I've worked out aout at least two hundred thousand dollars
worth of savings from this one episode off your home loan.
(26:50):
If you can apply this straight away, apply it consistently
and even dare I say build upon this this time
and savings potential explodes. And I've never someone who ever
regretted paying off their home loan sooner and faster. So
just to go a quick recap for everyone who was
listening to this episode. Number one, please go and do
a budget. If you want Joss Bank statement access where
(27:11):
you can have his program, look at your budget and
look at where you can potentially save money, and of
course take him up on that offer for a free
mortgage health check. I will be making sure I put
John's contact details, both his email address and his phone numbers.
You can pick up the phone and have a conversation
with him about your home loan. But promise me this,
you will go and do a budget. You will see
what extra payments you can and of course jump on
(27:31):
the Blue Lanterns website, look at their calculators, look at
the sugarmumb calculators and see the impact of those savings,
and of course make sure you apply those savings by
increasing your automatic mortgage repayments by that exact amount so
that those savings don't get spent elsewhere. Of course number
two is to look at a redraw facility or an
offset account. What savings do you have floating around an
online savings account that would be better off sitting in
(27:53):
an offset account or a redraw facility. Again, a good
quality mortgage broker will help set this up for you
so that this is working to your financial advantage. Number
three is look at ad hoc repayments. I use a
very simple example of the average Australian getting about two
and a half thousand dollars per year back is a
tax refund. You could go and spend that two and
a half thousand dollars, or if you wanted to, you
could put one thousand or even two thousand onto your
(28:14):
home loan, and the savings really are substantial. As John
has just explained, every one thousand dollars put as an
ad hoc repayment represents potentially up to five thousand dollars
in savings, So it's really literally like almost like a
risk free gambling if you like. Of course, Number four
is shopping around for a better deal. Do not let
yourself become a victim of loyalty tax, Do not get lazy,
(28:37):
do not get complacent, and don't feel overwhelmed. Refinancing is
actually very smooth, very simple, and this is why mortgage
brokers get paid by the banks because they do all
the hard work for you.
Speaker 2 (28:48):
Either.
Speaker 1 (28:48):
The biggest thing that people say to me when they've
spoken to Adam or to Joe or to John is
thank you so much. I can't believe how much they
were able to save us. We can't believe they feel
like they've almost like won the lottery. So shop around
for a debt of bill. Please don't ever settle, Please
don't ever be complacent about this. I would rather the
money be in your pocket rather than the banks, even
though I am a bank shareholder. Number five is to
(29:10):
consider if you can weekly repayments instead of fortnightly or monthly.
These may seem like small savings, but if you're in
a really tight budget and you can't make those extra repayments,
you can't make ad hoc repayments. You already have the
redoor facilities set up for emergency money and stuff like that.
This is a really simple way of not having to
find any extra money, but actually being able to save
a lot of money. And again those that interest savings
(29:31):
of seven hundred and forty eight dollars per year is substantial,
especially over the course of a thirty year loan. And
number six is obviously reviewing your mortgage repayments as I
have shared with you guys, and I sound a little
bit OCD and judge me if you like, but I'm seeing,
for once our mortgage coming down at a faster rate
I'm seeing our emergency money building up, but what gets
monitored gets made. I would truly believe that it is
(29:52):
so exciting when you see the actual cost of your
interest repayment getting taken out of the bank slowly reducing.
That is true savings in your pocket that hasn't in
nuts involved you necessarily having to sacrifice. I haven't had
to give up my gym membership or subscriptions or you know,
my monthly uber eats by making a simple change in
the way that you manage your cash phone. Of course,
I will link in the podcast notes the Sugar Mamma
Budget and cash Hood Academy if you want to learn
(30:12):
how to do a budget and stick to it. Number
seven is looking at an investment property, and this is
obviously not available for absolutely everyone because on everyone has
an investment property, but there may be other assets around
you that can be sold off, such as a share
pot follower and then reorganized into a debt recycling strategy
to help you save tens, if not hundreds of thousands
of dollars off your home loan and debt recycling strategy
is a very powerful one. I will definitely make more
(30:34):
episodes around this, but for the right people at the
right time, using the physical the right reasons. Yes, it
can save you a substantial amount of money off your
home loan, but also allow you to build wealth outside
of the family home. So these are really important things
that you need to be listening to and thinking about
and applying in your life. And of course, if you
are feeling stuck, if you are overly overwhelmed, don't use
this as a block and not do anything. Pick up
(30:54):
the phone, give John a call, ask him about what
he can do for you, give me your details, let
him on some numbers. It costs you absolutely nothing, and
you have so much to gain, all right, John, Sorry
I took a little bit passionate there. Thank you so
much for coming on to show I really appreciate it.
This has been such a powerful and valuable list. And
there are other things, of course beyond these seven things,
but I'll let you share those insights and ideas with
(31:16):
people that maybe you perhaps want to reach out and
speak to you. If they want to speak to you directly,
of course, your contact details will be linked below, including
obviously if they want to get access to the bank statements.
Speaker 3 (31:26):
Sure so, email or phone either is fine. Text me
on the way you know, you know, if you're on
the bus. Just obviously a bit of background as to
you know, how you got my number and you know random.
Speaker 2 (31:38):
Yeah, so you'll find my.
Speaker 3 (31:40):
Colleagues and myself are very approachable and yeah, we just
want to help.
Speaker 1 (31:43):
And just to reiterrect to everyone listening, I have absolutely
zero connection with blue Land and get asked all the
time who do I recommend? Who do I like? Who
do I trust? And I'm not going to recommend someone
I don't know that I haven't worked with, and I
haven't seen for myself how they work. And as I said,
you know, blue Lands look after myself, my family members,
and my friends, and I've only ever had amazing feedback.
I get zero benefit from doing this other than the
(32:04):
fact that I get to sleep at night knowing that
you're in really good hands with someone who's reliable, honest, transparent,
and he's bloody good at their job. All right, everyone,
thank you so much for listening today's episode on Sugarmuma's Fireplay.
If you enjoyed this episode, please make sure you go
and send it to your friends, send it to your
partner if you have one, send it to your family members,
because I really want to help Australians get their mortgages down,
(32:25):
actually see that they are powerful and capable of doing
this for themselves. And of course it doesn't actually take
too much effort to start to see a shift, a
breakthrough as those mortgage repayments reduce, those interest costs come down,
and you actually see that you're making substantial headway and
saying goodbye to that thirty year prescription made by your
bank and hello to fifteen, ten or even five years
(32:46):
mortgage terms. How good would that be? All possible when
you apply financial literacy to your financial situation, of course,
including all of those important valuable goals and trips. Thank
you everyone for listening to Sugarmuma's fireplay. In the meantime,
keep that financial fire burning Bright Chapel
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If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
My Favorite Murder with Karen Kilgariff and Georgia Hardstark
My Favorite Murder is a true crime comedy podcast hosted by Karen Kilgariff and Georgia Hardstark. Each week, Karen and Georgia share compelling true crimes and hometown stories from friends and listeners. Since MFM launched in January of 2016, Karen and Georgia have shared their lifelong interest in true crime and have covered stories of infamous serial killers like the Night Stalker, mysterious cold cases, captivating cults, incredible survivor stories and important events from history like the Tulsa race massacre of 1921. My Favorite Murder is part of the Exactly Right podcast network that provides a platform for bold, creative voices to bring to life provocative, entertaining and relatable stories for audiences everywhere. The Exactly Right roster of podcasts covers a variety of topics including historic true crime, comedic interviews and news, science, pop culture and more. Podcasts on the network include Buried Bones with Kate Winkler Dawson and Paul Holes, That's Messed Up: An SVU Podcast, This Podcast Will Kill You, Bananas and more.
The Joe Rogan Experience
The official podcast of comedian Joe Rogan.