Mortgage minimisation - own your home faster

Ask any of the 30% of Australians with a mortgage whether they would like to pay off their home loan faster, and I'm sure you would hear a resounding yes.

Mortgage Minimisation is a real concept that saves money and years off your mortgage term. It's a smart and simple concept that through simple money management and budgeting can positively change the way you spend and manage your household income and expenditure.

Whilst not for everyone, those that are good budgeters and have good spending habits can certainly benefit from the concept.

Diagram 1.1 illustrates how some Wilson National customers are able to structure their loan. These customers benefit by saving thousands of dollars in interest and will own their home faster, compared to a customer who chooses a traditional home loan.

Let the savings begin.

The first step in minimising your mortgage, is to set up a Wilson National Line of Credit account. The way it works is simple. Having your income paid directly into your Line of Credit account immediately reduces the amount of interest you pay on a daily basis, and with the maximum amount of funds available.

What this means is that you're able to put all your money to work, until the point where it's needed. You see, whilst your income is reducing your loan balance and saving you interest (like an offset account), you make household purchases and pay bills using your American Express Link Point Card's 55 days interest free period. In essence, you're living interest free as your income is reducing the interest that you would normally pay on your mortgage account.

Another advantage, is that by using Wilson National's American Express Link Point Card to make your purchases, not only are you giving yourself 55 days interest free, but you're also generating American Express reward points - which will give you some extra little bonuses along the way.

Then every month, arrange for your, Wilson National Line of Credit account to sweep your American Express Link Point Card, clearing the balance to zero. By setting up your Line of Credit to sweep (pay to zero) your American Express Link Point Card every month means you pay no interest on your Link Point Card purchases.

Cash transactions can be made by using your Mastercard (debit card) to withdraw cash from any ATM (free of charge using Westpac ATM's) or you can write cheques which are directly debited to your Line of Credit account. Of course, to maximise your mortgage minimisation program, these up-front cash transactions should be kept to an absolute minimum, so your total income can be left working on your loan for as long as possible.

The real benefit of mortgage minimisation is when you leave as much of your income as possible in your Line of Credit account. It is important to remember, to avoid default, as a minimum, you must cover the monthly interest on the loan.

So, if you can stick to a budget, cover your monthly interest payments, and are willing to leave all the cash that you don't spend in your Line of Credit, you will see that your loan will start to reduce quickly.

Alternatively, for those who like the security of having a Principle and Interest reducing home loan, we have options available that accept salary crediting. Using this option, you would simply transfer funds to any bank account as a redraw via our Internet banking service. Remember though, there is no ATM access or cheque facility using this option, however, for those that really want to stick to their budget, this option makes it a little easier to override those tempting spending sprees.

Wilson National can help you set up your mortgage accounts so they are working as hard as you do. Remember Wilson National offers you modern convenience too; all accounts are manageable online at wilsonnational.com.au or via our telephone banking facility. So if you need to transfer funds between your accounts, you can, when you want, and with no fees!

To find out if you're eligible to minimise your mortgage, please call 1300 288 828 or email info@wilsonnational.com.au and speak to one of our Home Loan Managers.