One in five older working Australians expects to retire with a mortgage, according to new research conducted by REST Industry Super. While this can be attributed to a number of factors, one key reason is a reliance on lenders telling you what you can borrow.
Make sure you understand this:
- Your lender will approve the maximum amount you can borrow – not how much you SHOULD borrow.
- Your lender will tell you the regular minimum repayments you have to make – not the regular repayments you SHOULD make.
A 30 year loan will take 30 years to pay off if you only ever make the minimum repayments. So if you are taking one of these out in your 40’s…
The government’s Moneysmart website is a terrific resource to help you better understand all aspects of money including borrowing. The mortgage calculator can help you work out how to pay your home off sooner. Combine with my best money saving tip and you can get on the right track to being mortgage-free in retirement.
Use these tools to do you own research or get some advice from a good adviser or mortgage broker.