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Top 10 Mortgage Hacks for Financial Success in 2018

John J Maxwell | December 01, 2017

With a financial services career spanning more than 16 years and over 25 years of business and entrepreneurial experience, I've discovered it's NOT knowledge that most of us struggle with. Myself included - we all know a lot of stuff. Much of it useful, some of it useless but nonetheless interesting - we're gonna keep this stuff just in case we need to whip it out at a party to show how 'clever' we are.

The real issue, which largely stems from a mass influx of data, facts, figures, media and everything else in-between is RETENTION! The reason a lot of content is repeated and recycled is that it's just so damned good. It's the tips, tricks, and hacks that we love, but generally just forgot about. Quietly, we love the new years' resolutions and the Christmas hangover tips which come around each and every year.

On that note, I've compiled my Top 10 Mortgage (Money) Hacks. Some of these you will know and are probably doing well. Some you know, but forgot to keep doing it. A few might be new for you or just phrased in a different way. Either way, I hope these collective hacks make a difference for you and your family to enjoy the best and most festive Christmas and New Year ever!

Keep your savings on your mortgage. It's astounding how many families I meet, who have one or more savings accounts whilst also paying a mortgage. Why pay tax on interest earned from these accounts (even if it's only a small amount) when you could be offsetting a higher interest cost on your mortgage - aka bad debt. If you need to separate your savings from your partners, either keep a spreadsheet/journal of deposits and withdrawals - many apps can make this easy OR one of you use an offset account, and the other directly deposit and withdraw from the flexible home loan.
Consolidate your personal finance into your home loan. Provided you have accrued sufficient equity within your home, you can greatly improve your cash-flow position by consolidating your car loan, personal loan and credit card/ store card debt into one easy low repayment on your home loan. The key here is to reduce the interest rate to home loan rates being much lower than unsecured loans and credit card rates. You're also extending the term of the loan which lowers your repayment commitment. SUPER HACK: Maintain the OLD repayments of your personal finance commitments pre-consolidation into the home loan or offset account. This will maintain the short term of the previous loans and create forced savings, paying down your loan very fast. If you encounter an emergency - the funds will be there when you need it!
Use a Budget. There are many apps available to track your income and expenses and keep you informed of your spending (and savings) habits. 'Out of sight - out of mind' is insufficient when managing your money. It's just too easy to overspend on impulse and emotional buys. If you want to save money, you MUST spend less than you earn - Right? Only when you can see your money position can you be responsible for the desired outcome. I continually see couples earning a combined income of $80,000 or less out-saving couples earning 2-3 times that. You can't live beyond your means and expect things to be different. SUPER HACK: When shopping for groceries: 1. Take your shopping list with pre-planned meals and ingredients. You can eat very very well for $60-$100 per week for a couple. Eat before you go shopping and only buy what's on the list - I still get in trouble for this one when I go shopping and I'm hungry lol.
Put your income/s in your offset-account. Whilst your income is resting in the offset account or directly on the (flexible) loan you are saving interest every day. This is because interest is charged monthly BUT calculated daily. Even if you must spend the majority of the income by months end, you can still pay your mortgage off in half the time or sooner! I see too many couples and families sticking to old habits and depositing their money into their savings account and thinking it won't benefit them if they are not saving much or any money each month or simply because they never got around to instructing payroll to deposit their wages into their specified loan or offset account.
Every Winner needs a coach. I've never seen a sporting star who doesn't have a coach to create their goals, habits, and mindset and to hold them accountable for winning the game. If you truly want to win the game of money - you must have a money coach. Many brokers or financial consultants don't charge for their services, however, there is only a small percentage who are categorised as money coaches. You need to seek one out and have them on your team. You should NOT have to pay additional for this service. This is possibly the best investment you can make when playing the money game to win!
Review your financial position regularly. Those that are winning the money game all have one thing in common. They know exactly where they are at all times. Those that are NOT winning their game also have one thing in common. They don't have a clue where they are at any given time. Know your numbers - if you don't like numbers, your partner often does. Your money coach will also be happy to assist you with this. SUPER HACK: Once you know your position - it can make life much easier to automate your bill payments. Preferably set this up within your internet banking so you have the flexibility stop a payment or make a prior arrangement with any billers if necessary. Ensure you communicate with any late or overdue accounts and negotiate an extension without any penalties - late payment fees or default interest just undoes all the hard work you've previously done.
Review your costs periodically. Once you know where you are at, how much you are spending and saving, it's easy to compare and get a better deal and lower your expenses. Contact your mobile phone, utilities, and other bill carriers and negotiate a better deal. When buying household items and gifts, google the different deal sites and online shopping sites. This can save you up to 70% or more on the cost of identical or comparable items. If you spend less than you earn you naturally save money! When reviewing your costs - create the intention to eliminate any costs which are unnecessary. Ask yourself, for instance - Do we really need to have Foxtel? Winning your money game is not always about going without. Often it's about finding more efficient ways to achieve the same outcome. However, sometimes we just need to eliminate some costs. What's more important to you - saving for an investment property or owning your own home sooner or is going out to dinner more important? You decide - it's your choice.
Pay yourself first. If you, like many Australian families, are struggling to meet your financial commitments every month, or your expenses fluctuate from month to month - pay yourself 10% of your income before you pay anything else. Simply increase your minimum repayment by at least 10%. This creates forced savings as well as some interest cost savings. The extra money will accrue if you allow it to. Make sure you are using a budget and you will find you still manage the bills each money just the same. It's a good idea to speak with a money coach to learn how to stay on track.
Pay your mortgage more frequently. Many mortgages are set up as monthly repayments. Inherently, this can be convenient when setting up a new mortgage and settling your finances. As soon as you can, change your repayments to at least fortnightly and if possible - pay extra by rounding out your repayment to the next higher round dollar. ie. if your fortnightly repayment is $1383 - round it up to $1400 or $1500 fortnightly. If possible, pay your mortgage weekly. Generally speaking, this is most commonly only done if you consistently get paid weekly. You should also preferably do this once you have accrued a redraw buffer in your home loan. Tax cheque time is often a good time to do this. By paying weekly, you keep a close hand on your cash-flow and you should be less likely to spend on those unnecessary or impulse items - especially if you are focused on your goals every week. TIP: create periodical and proportionate rewards for achieving monthly and quarterly goals. Make sure the reward is something you and/or your family really value and appreciate. ie. a trip to your favorite dessert bar will taste that much sweeter as an earned reward.
Maintain the best mortgage for you. At least every 2-3 years you should be reviewing your mortgage to ensure you have a mortgage that is suited to your specific needs: 1. review the structure/s of your loans. 2. review the fees and charges. 3. review the features and flexibility. 4. review the interest rate. 5. review your situation and circumstances - they may have changed entitling you to receive additional discounts or benefits. 6. review the repayments taking into consideration all of these points. I continually see many clients who have had the same mortgage for the last 5-8 years. It was extremely competitive when you got it - but it's way off the money today. The difference in many instances is as much as 1% higher than the current competitive lenders.

BONUS HACK: Other than spending less than you earn, the only other way to improve your financial position is to earn more than you spend. Conjure up the courage to ask your boss for a pay-rise. Have an annual garage sale, take a second (part-time) job - turn a passion into some extra income. Many of our more successful clients utilized or created some equity in their home to create a deposit to purchase an investment property. With the additional income received through rent, they were able to reduce their personal bad debt (home loan) sooner and also maximise their tax benefits through good debt (investment property loan).

There are many more hacks and tips that you can use to ensure you stay on track and win your money game. Feel free to add any tips you have (in the comments below) that can make a difference to other readers.

John J Maxwell, senior mortgage & finance consultant, Cocalex Holistic Consulting

If you have any questions or contributions relating to this article, please take the time to comment below and share your thoughts or opinions for the benefit of others reading this. No doubt this topic commands interaction, innovation, and collaboration. The more answers that are delivered, the more questions that will arise.

If you'd like some unique articles, like this one, written for your website, blog or social media, or if you have any personal questions or queries, please feel free to contact me via the 'Contact me' link on my SimplyAskIt profile.

About the author:

John Maxwell is the founder and Senior Finance & Business Strategist at Cocalex Holistic Consulting. John has over 17 years' experience in the financial services sector, and has owned and managed 9 mortgage franchises and has developed a background in the holistic financial services realm. He has particular focus and passion for Leadership Training & Development, Writing, Franchise Development, and Business Networking.


great insights, thanks for sharing John

About Me

John J Maxwell

Current Rating: 4.88 / 5
Financial Services Executive
Cocalex Consulting
Millers Point, New South Wales
With over 30 years experience as an entrepreneur and 20 years in financial services, John is well positioned as a business consultant and content creator for finance professionals and mortgage brokers.

Contact John on M: 0434 544 225 or
E: john@cocalexconsulting.com.au

John is the founder of Cocalex Consulting, focusing on Industry article writing videos; infographics; eBooks; social media campaigns and consulting services within the allied professional services sector.