Home Loan Misconceptions
"It’s all about the interest rate"
Both John and Mary had mortgages of $300,000 at a rate of 7% p.a - making monthly repayments of $2,200. They both had similar incomes and were both expected to pay off their respective loans in about 28 years. The total interest they would have had to pay back would be $439,200 each making the amount they really borrowed from the bank $739,200*.
After a free, 30min consultation with GN Finance, Mary decides to go ahead with restructuring her loan according. Mary’s interest rate is still 7% p.a, her repayments are still $2,200 a month, but now she will pay off her loan in 17 years. The total interest is reduced from $439,200 to $148,000 - a saving of $292,200 over the life of the loan*
*Figures are for demonstrational purpose only and do not include bank fees, charges and any changes to the interest rate over the life of the loan.
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|
Mary's Mortgage
(Prior to Restructuring) |
Mary's Mortgage
(After Consultation & Loan
Restructuring) |
| |
Principal Borrowing |
$300,000 |
$300,000 |
| |
Interest Rate |
7% |
7% |
| |
Term of Loan |
28 Years |
17 years |
| |
Monthly Repayments |
$2,200.00 |
$2,200 |
| |
Total Interest |
$439,200 |
$148,000 |
| |
Total amount Paid Back to Bank |
$739,200 |
$448,000 |
| |
Nett Saving (After Tax) |
|
$291,200 |
Interest might be calculated daily, but that doesn’t mean you have to pay daily or even monthly.
Daniel has been self-employed for many years. He’s always had more than enough to cover his total, annual principal and interest payments of $39,750; however his business cash flow slows down tremendously in the summer time, as he supplies parts to smash repairers who mostly close during the summer break. It is around this time that his quality of life decreases, as Christmas presents, holidays and the mortgage repayments are too much for his reduced summer income.
After a free, 50min consultation with GN Finance; Daniel decides to go ahead with restructuring his loan according to my suggestions.
His rate hasn’t changed, but he can now pay into his loan whenever he wants; whether it be once a quarter or not for the whole summer period. With our professional systems in place his principal and interest repayments were HALVED within 11 years and his loan was paid off in 16: with a saving of well over $350,000
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|
Dan's Mortgage
(Prior to Restructuring) |
Dan's Mortgage
(After Consultation & Loan
Restructuring) |
| |
Principal Borrowing |
$470,000 |
$470,000 |
| |
Interest Rate |
7% |
7% |
| |
Term of Loan |
25 Years |
17 years |
| |
Monthly Repayments |
$3,312.50 |
$3,312.50 |
| |
Total Interest |
$520,000 |
$165,000 |
| |
Total amount Paid Back to Bank |
$990,000 |
$636,000 |
| |
Nett Saving (After Tax) |
|
$394,000 |
How is this possible?
Call GN Finance for an obligation-free consultation.
Obligation-free consultation - what’s involved
An obligation free consultation includes agreeing on a time for one of our consultants to meet with you (at your home or on the telephone). We will generate an interest analysis, including considering where you personal and financial goals.
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