Mortgage repayments are not exciting. There, I said it and it’s a sentiment I think the Federal Opposition Leader will find out first-hand this weekend.
Let’s face it, none of us are strutting into a party saying: “You should see how much of my mortgage I paid off last week.”
Maybe we should, as for a third of Australian households, the mortgage is their biggest monthly budget burden.
Owning a home outright is more than the Australian dream… it’s financial freedom.
Consider this, the average Aussie mortgage sits at about $650,000. At today’s interest rates (which is about 6%), that means you’ll pay:
- Over $1,400,000 in total repayments
- $650,000 in principal, plus an additional $750,000 in interest
It’s worth remembering that homeowners pay their mortgage with after-tax dollars. That means to repay their $650,000 loan, they’ll need to earn around $2 million, before tax.
Let that sink in for a moment:
- You work two million dollars worth of hours… just to pay off a $650,000 home loan.
Now consider that what no TikTok ‘finfluencer’ will tell you is that there’s no secret, no hack, no shortcut.
If you want to pay your loan off early, there’s one thing you need to do… pay more and pay sooner.
Let me convince you. Below is what happens if you pay just $1,000 extra each month:
- You knock nearly 12 years off your loan;
- You save $330,000 in interest; and
- You go from needing $2 million in income to just $1.5 million (still a lot, I know).
That’s pretty significant, right? So, where do you find the extra grand each month?
Well, you’ve got two options:
- Spend less
To spend less, see if my budget tool can help by distinguishing between needs and wants. Do you really need the five streaming subscriptions and a 7th pair of sneakers?
- Earn more
To earn more, you could hit your boss up for a pay rise or start a side hustle selling trinkets from China. But there’s another way: earn more by paying less tax.
Here’s how it works:
- Average full-time salary in Australia: $103,000
- Typical tax bill: $24,000
- But with smart tax planning — like negative gearing and claiming depreciation (a non-cash deduction) — you can legally cut that tax bill in half.
Halve your tax bill and you’ve found $12,000 – or $1,000 per month back in your pocket.
In my book I wrote how every Australian should want to:
- pay their home loan off as fast as possible; and
- pay as little tax as possible.
The good news? You can do both and you can start today.
Email me for a free personalised strategy to help get you started.
And while you’re at it, maybe look at keeping one streaming service. You’ve earned it!
