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You can save thousands in interest and cut years off your repayments with just a few small changes to your mortgage structure. A lot of people may not realise the total cost of their home. As a very rough guide, a 30 year loan term could cost you twice the amount you originally paid for your home. For example, if you purchased a property for $500,000 with a 20% deposit, that means you have a $400,000 mortgage. Say with a 5.75% interest rate, over 30 years, that would mean a total interest cost of $439,766... making the total cost of your home $939,766! Admittedly the current fixed rates are a lot lower than the above, but history shows 5.75% is a very reasonable rate to work with. Pretty scary to look at those numbers, I know, but this is where I can usually help. A few small changes can make a very big difference. In the above case, if you increased your repayments by just $12 per week, you would save $28,251 in interest. I am sure we can all manage that! Or, if you can manage to pay an extra $100 per week, this saves over $157,000! These simple examples just show that anything you save now can make a huge difference to your financial position. Of course there are other ways that can increase these savings even more, especially if your budget is a bit tight. Loan structure is a big one, as everyone's situation is different. You may be self-employed, so could have an unpredictable income. This may mean locking in an extra $100 per week is unrealistic, so a revolving or offset mortgage may suit you better. An offset loan is a loan that you can link your savings accounts to and any money held in these accounts reduces the portion of your loan that is charged interest. This would mean an interest saving of 5.75% in the above case. Obviously that is much more than you would earn in your everyday savings account. How it works in this case:A $400,000 mortgage with $25,000 savings linked, would mean you are only charged interest on $375,000 of your mortgage. If you managed to leave that $25,000 there for the whole mortgage term, but still paid the standard weekly repayment, you would repay your loan 4 years earlier and save over $95,000. Add that extra $12 per week and it makes your total savings $116,961 and 5 years of repaying a mortgage! Of course, everyone’s situation is different, so I always suggest to get in touch with a good mortgage broker, whether that is me or someone else. A little mortgage advice can go a very long way. These are just examples of how you may benefit from talking to a professional. Also, as your equity grows, we can look at property investment which may help you repay your mortgage even faster. This blog is of course not intended to be personalised financial advice in any way, it is simply showing some examples of how I may be able to help you save with your mortgage. So don’t delay, just get in touch for a chat about your situation. It may save you more than you can imagine, and as I mentioned, my services are completely free to you. All the best for now, thanks for reading. Chad Adair Financial Adviser, specialising in Mortgage Advice. #savings #networth #wealthcreation Adair Mortgages are leading mortgage advisers in Christchurch, Queenstown and Wanaka. Give Chad a call today!

When you invest in a property you are really making an investment in the market the property is located in. This is similar to the old adage “buy the worst house in the best street”. If you buy an average property in a great market, it is likely you will do well over the long term. However, invest in a great house in a poorly performing market and you are probably going to achieve mediocre returns. That's why when starting your property investment journey it's essential to take the time to analyse the market, the city and suburb your prospective investment is in. Don't just think about the property alone. A client recently asked me why we recommended an investment in Cashmere, Christchurch. I thought I would share the response, as it may be a useful case study, showing how to analyse a suburb's property market.

The new season is a great reason to make and keep resolutions. Whether it’s eating well or cleaning out the garage, here are some tips for making and keeping resolutions.