5 Hacks to Dominate your Mortgage😈

So you know the saying rent money is dead money

Well guess what? Interest is also dead money. Let me share with you some ideas to pay your home loan off way faster than the bank would like

Hi everyone, welcome back to my channel

I am financial planner Canna Campbell and this is SugarMammaTV. Today I want to talk to you about your mortgage and to make you realize or help you realize

that you have the ability, if you want, to pay your mortgage off a lot sooner than the

bank prescribed. Most people, including myself, when they take out a home loan, the bank automatically puts

us on a 30 year term. I don't know about you, but I do not want to be in my 70s or 80s or even my 60s for

that matter, still paying off a mortgage. I want to get the monkey off my back as quickly as possible

But guess what? Even though it may seem and feel very intimidating to think you could pay a large loan off sooner

you actually can. So I want to share with you five different ideas that can help save you valuable time

and interest. Now, before I share these five ideas with you, I want to just quickly connect with you

for your why. Why would you want to pay your home loan off sooner

Is that a boring, dull goal to have? Absolutely not. Think about it

Say your mortgage repayment stopped. You would have all that money in your account every single month

You'd have more money for opportunities. You'd have more money for freedom

You'd have more money for luxurious choice time. And of course, you'd have so much more financial stability in your life

Also, with that money no longer coming out of your account every month or every week

or every fortnight, it gets to stay with you. And that is money that could be invested

That is money that could be spent on more holidays, longer holidays, better holidays

That is money that could be invested or money to help you plan for a better, earlier, and

way much more luxurious retirement. Who wouldn't want to pay their mortgage off sooner

All right, let's talk about how we can help make this happen for you

So step number one is to do a budget. If you haven't done a budget already and you don't know how to or where to, make sure you

go and check out my online Sugar Mama Budget and Cash Flow Academy

Not only do I show you how to do a budget, but I also show you how to build the cash

flow system so that it makes sticking to your budget really easy and actually achieving

your financial goals and dreams. Now when you're doing your budget, one of the steps that I recommend is to look at each

and every single expense and question the value. Look for ideas to help cut down an expense or cut it out completely

The moment you discover an expense that you can cut down or cut out, make sure you proactively

take that newfound savings and redirect those newfound savings to your mortgage repayments

But here's the trick. You must prioritize making this an automatic increase

So say for example, we decide to get rid of one of our subscription services, saving us

$30 per month. The moment I have canceled that subscription, I need to contact my bank, you can often do

this online, and increase our automatic mortgage repayments by $30 per month

This stops the risk of that newfound $30 worth of savings per month being spent elsewhere

We want to make sure that any savings we find, we capture, quarantine and redirect towards

improving our financial wellbeing, which in this case is being mortgage free

Now as part of my fruitful, frugal February challenge, I put a tile up on my Instagram

account and by us saving $120 per month by simply negotiating a better deal with our

electricity, gas and Foxtel, we were able to save $120 per month

Now I used a mortgage example of $650,000 and I can see that if we increased our mortgage

repayments using these assumptions, we would save over $73,400 and pay our home loan off

two years and four months sooner. That's simply by increasing our mortgage repayments by $120 per month

When you do a budget and you get on the phone and hustle up a better deal, you'll find some

great savings. I personally guarantee it. But remember, you've got to increase those automatic repayments so they don't get spent elsewhere

And it goes without saying, always speak to your bank before you do this in case there are restrictions on your loan, such as a fixed home

Banking they give you advice accordingly. Number two is to consider switching your mortgage repayments to a higher frequency

For example, instead of paying your mortgage monthly, switch to weekly. Now I have to warn you with this

It can play havoc with your budget if you are someone who gets paid on a monthly basis

and pays their mortgage repayment shortly after being paid. Because with this strategy, you're actually squeezing an extra week's repayment per year

onto your home loan. Now it definitely works because it could save you up to five years off your home loan and

potentially tens, if not hundreds of thousands of dollars in interest. But it can play havoc with your cash flow and your budget because you need to make sure

you can service those weekly repayments every single week, which can be scary if your pay

cycle isn't in sync. Another great idea that has the same benefits is to look to increasing your existing current

monthly or fortnightly repayments by 8.55%. This has a very similar impact and it means you still have the safety, security and consistency

of your current pay cycle and mortgage repayment. It's one less thing to have to worry about

Number three is to consider using an offset account or a redraw facility

So many people I've spoken to told me that they have emergency money and they're so proud of that

But when I ask them, okay, where do you keep that money? They tell me it's in an online savings account floating around in cyberspace, but they have

a mortgage. Now what those people may be better off doing is actually using an offset account or a redraw facility

This is the problem. Say they have $40,000 in an online savings account and say that they are earning maybe

if they're lucky, 5% interest. That interest is then taxable, which really reduces the amount of money that they're getting

back in their pocket from a net point of view. If they were to look at an offset account or a redraw facility that work in similar

ways, it would mean that that money is offsetting the amount of interest the bank charge each month

So say for example, I have a $400,000 home loan. If I have that $40,000 sitting in a redraw facility or an offset account, instead of

the bank charging interest on the full $400,000, they charge interest on the $360,000, which

means my monthly interest expense is significantly smaller. And assuming I maintain my same mortgage repayments, I'm actually starting to pay off more of the principal

Now, my personal mortgage broker, Adam McCabe from Blue Lantern, put up a grid post on his

Instagram account, and he actually showed the benefit of an offset account

In fact, with this exact same example, you could save up to $114,000 in interest and

pay your home off four years sooner. Of course, you always need to keep in mind if you draw the emergency money out in the

event of emergency, the time and interest savings reduced. But that is why it's really important that you replenish that emergency money as quickly

as possible. So speak to your bank or your mortgage broker about an offset account or a redraw facility

to help you get your mortgage paid off faster, saving valuable time and interest

Number four, shop around for a better deal. Loyalty tax is expensive

There are new deals coming into the market every single day, and you have way more power

than you realized. So you can actually get on the phone to the bank yourself and tell them that you're looking

for a better deal or you'll be going elsewhere. Obviously, always keep it professional and be respectful, but it is always worth giving

your bank the opportunity to see if they can match their competitor's offer

You should also be aware that quite often when a new product comes into the market

it's only for new customers, which is why I say loyalty tax is expensive

And according to my own personal mortgage broker, Adam McCabe, he says there's a four

year sweet spot, which is where he's quite often better off going to refinance with another

loan provider and getting a far better interest rate, which can actually help you leapfrog

if you can maintain the same mortgage repayments and get your home loan paid off just as quickly

if not sooner. Five, ad hoc transfers. Did you know that you can actually make random ad hoc transfers onto your home loan

$100 one week, 250 next month, maybe a $2,000 bonus the month after

You can do that. Assuming that you're not on a fixed rate and your bank is comfortable with you making these

ad hoc repayments, this is completely allowable and it can have a very powerful effect in

looking at your monthly interest expense and seeing it come down. Of course, it goes without saying, make sure your regional facility is switched on in case

you need to redraw that money out. But this is a great hack to know and perfect for things like bonuses or tax refunds or

things that you just happen to sell on Facebook, Marketplace or Gumtree where you've got some

extra cash, don't have anything you want to do with it, and you'd like to maybe get your

home loan paid off faster. This is a great place to park that money

Now, did you know that the average Australian receives up to $2,500 per tax year as a tax refund

Using a very basic example where someone has an $800,000 home loan and they put their $2,500

tax refund, for example, this could save them over $11,000 in interest and pay their home

loan off four months sooner. Now when you combine that with increasing your regular repayments by say $100 per month

the impact and benefit magnifies. Instead of being $11,000 worth of savings, this can be up to $70,000 worth of savings

and in fact, pay your home off one year and 10 months sooner

These are all very doable things that you could do. But what I would say to you right now if you're on a tight budget, do what you can afford

to do safely right now with the resources you've got. Slowly and steadily look to increase your mortgage repayments when this is possible

Things like tax cuts that are upcoming, pay rises, promotions, any little financial windfalls

that may come your way. Having a goal to be mortgage free is a great one

And as I explained in the beginning of this video, it opens up a world of opportunity

for you to create greater financial stability, more wealth creation opportunities and greater

financial wellness in your life where you get to benefit but so does everyone else around you

All right, everyone, thank you so much for watching. I will see you next Thursday. So make sure you are subscribed

And of course that notification bell is switched on because I will be back next Thursday