I will never forget the conversation between myself and Tom, talking about mortgages. Tom had been told that you always have a mortgage, (until you die) and no one ever does or can actually realistically pay off their mortgage – it is only in movies and dreams that this can happen. He had accepted this as the truth and never did anything to challenge this.
This excited me as I knew I could (for once) prove Tom wrong…
I quickly jumped online to find some generic lump sum repayment and extra repayment calculators. I plugged in all of Tom’s mortgage details, (how much he owed, how long into his mortgage etc), and used an average mortgage rate of 4% p.a. and then I sat him down and showed him what a few extra hundred dollars per month could possibly do to shorten his loan term and the amount of potential interest he could save.
His face was white, with shock, which quickly turned to red with embarrassment when he realised that he had simply taken on this opinion (given to him by a finance expert) as fact. And that having a go at paying off your mortgage sooner than the bank’s prescription term (on average 30 years) is well worth the effort.
I left Tom to continue on playing with these calculators, opening his mind and the possibility of having a mortgage free life. Before I knew it, Tom was now giving me lectures on the importance of financial goals around your mortgage and how much valuable time and interest you can save. Needless to say, Tom loves checking our mortgage – especially as we have one together.
So if you dream of a mortgage free life, see what a few extra repayments (lump sum, or regular) can do to add value in your life. Our calculators are free to use, but they are only to be used as a guide, but can definitely kick start new motivation if this is one of your financial goals.