Invest
4 steps to a mortgage-free retirement
More Aussies are entering retirement with a mortgage, but there are still ways to shrug the burden off sooner, a financial planner has said.

4 steps to a mortgage-free retirement
More Aussies are entering retirement with a mortgage, but there are still ways to shrug the burden off sooner, a financial planner has said.

According to a recent report from BIS Oxford Economics, 42 per cent of Australians between 50 and 64 are carrying a mortgage, up from 20 per cent in 1996, meaning more households will be entering retirement with a mortgage burden.
However, Steven Korner, financial planner at Omniwealth, said there are four steps all Australians can take to pay off their mortgage sooner.
1. Offset – you’re crazy not to
An offset account is a bank account that does not earn interest. Instead, it offsets the interest paid on a loan as it considers the money in the account has been paid off in the loan.
“This still gives you the freedom to use this cash if needed while paying less interest on your home loan,” he said.
“It is crazy not to have at least one of these. Every account I own is an offset account to my loan (I have five accounts). This has saved me thousands per year.”
2. Do the maths, increase income – not expenses
“This sounds simple, but it is one of the most effective ways to pay off your loan faster. Budgeting is key,” Mr Korner said
He said borrowers should think about their necessary and discretionary expenses, while also looking at ways to increase income.
“Start with the goal in mind and then work back from there. People don’t plan to fail, they fail to plan.”
3. Invest
Mr Korner argued the family home is a liability, not an investment, so it’s critical that home-owners invest outside of the home and think about putting extra cash towards investing and not just the home loan.
He said investments often have specific tax advantages, which coupled with growth can help pay off the mortgage much faster.
4. What’s your rate?
“You should be reviewing your home loan rates once a year. If you aren’t then you are potentially missing out on a truckload of savings,” Mr Korner said.
“One approach is to let them [your bank] know another bank has offered you a much lower rate (make sure you do your research first, of course) and ask what they can do to match the lower rate.”
Switching from a 4.3 per cent interest rate to a 3.8 per cent rate on a $1 million mortgage would mean $5,000 a year in savings. Over the life of the loan, that could be as much as $150,000.

Property
Which capital cities are most attractive to property investors?
A new survey has suggested that investor attention is shifting away from Australia’s two largest capital cities. ...Read more

Property
Market uncertainty fails to discourage foreign property investors
While interest from foreign investors in Australian property has remained strong, HLB Mann Judd warned that tax increases could see demand shift to other markets. ...Read more

Property
Regional renters forced to spend more of their income than ever before
Renters in regional areas are spending nearly as much on rent as home owners are spending on mortgage repayments. ...Read more

Property
Aussie home buyers now need to save for over 11 years for a deposit
Since early 2020, the time needed to save for a deposit has increased by more than two years. ...Read more

Property
HSBC forecasts 2023 house price decline of up to 10%
The firm had previously predicted a modest rise for house prices next year. ...Read more

Property
Perth house prices continue climbing to a record high
While growth may have come to an end in Sydney and Melbourne, Perth house prices are still on the rise. ...Read more

Property
Stamp duty significantly slowing path to purchase for FHB
Saving for a home takes years for the typical first-time buyer. In Australia’s largest cities, as much as two years are spent simply building up the funds to pay the cost of stamp duty, according to...Read more

Property
House values dragged down in latest index
A new set of figures outlining the present state of Australia’s residential property market has been released, indicating a bleak outlook for growth in metropolitan areas as the Reserve Bank of Aust...Read more

Wrapping up an eventful 2021
Listen now

What Omicron means for property, and are units right for first-time buyers? What is equity crowdfunding? Are industry super funds tapping into member funds to save their skins?
Listen now

Will housing affordability improve in 2022? Will buy now, pay later become the norm? Why are Aussies staying in failing super products?
Listen now

Who really benefits from crypto ETFs? How will the RBA respond to rising inflation? Could a mandate help address unpaid super?
Listen now

Property
Which capital cities are most attractive to property investors?
A new survey has suggested that investor attention is shifting away from Australia’s two largest capital cities. ...Read more

Property
Market uncertainty fails to discourage foreign property investors
While interest from foreign investors in Australian property has remained strong, HLB Mann Judd warned that tax increases could see demand shift to other markets. ...Read more

Property
Regional renters forced to spend more of their income than ever before
Renters in regional areas are spending nearly as much on rent as home owners are spending on mortgage repayments. ...Read more

Property
Aussie home buyers now need to save for over 11 years for a deposit
Since early 2020, the time needed to save for a deposit has increased by more than two years. ...Read more

Property
HSBC forecasts 2023 house price decline of up to 10%
The firm had previously predicted a modest rise for house prices next year. ...Read more

Property
Perth house prices continue climbing to a record high
While growth may have come to an end in Sydney and Melbourne, Perth house prices are still on the rise. ...Read more

Property
Stamp duty significantly slowing path to purchase for FHB
Saving for a home takes years for the typical first-time buyer. In Australia’s largest cities, as much as two years are spent simply building up the funds to pay the cost of stamp duty, according to...Read more

Property
House values dragged down in latest index
A new set of figures outlining the present state of Australia’s residential property market has been released, indicating a bleak outlook for growth in metropolitan areas as the Reserve Bank of Aust...Read more