If you are like many Australian’s you own a home and hope to pay it off as soon as possible.

While there are many strategies around that claim to help you reduce your home loan, much of the time they make very little difference because the bank actually wants you to have easy access to your money so you can spend it, stay in debt, and they keep their healthy bank profits soaring.

Strategies that sound good such as linking your credit card to your loan, putting all your expenses on your credit card and paying it off each month, paying for a new car or holiday via your mortgage to get a cheap interest rate, all sound like good advice. 

Unfortunately in reality many people find that after years of using these so-called strategies their home loan is not going down or its even going up thanks to the overseas holiday, the car balloon payment or other unexpected expenses.

Luckily, there are ways to actually ensure your mortgage does go down every year!

Combining psychology and finance, I have coined a term ‘Structural Finance’. This is the philosophy that, when set up correctly using a ‘structure’ to keep your debts separate to your everyday expenses, you actually spend less yet don’t notice any impact on your lifestyle.

These savings are then channeled into paying upfront for your holidays, cars and paying extra off your mortgage resulting in a real reduction in your mortgage.

For example, if you have a typical $400,000 mortgage and you pay off an extra $240 per week your 30 year home loan will be paid off in just 15 years! That’s half the time and saves you approximately $154,000 in interest.

For more information or to discuss your own circumstances, call 0400 11 4000.