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90 Marine Terrace Fremantle, WA, 6160

hoodwinked by advertising

What does every lender advertise like it’s the most critical, all-important aspect of borrowing? 

Their ‘low’ interest rates. Rates, rates, rates. It’s all we ever hear about. How gullible they must think we are. 

And the majority of us are, indeed. 

We’re told that having a low interest rate will somehow make our lives easier, save us thousands of dollars and it means we’re getting a cheap loan. Right? Wrong. 

This is a fallacy. 

Through crafty advertising and ignorance, we’ve been blindsided and misled into shopping for a loan based on the rate. 

A lower interest rate allows you to pay less for the money, sure, but the term of the loan will make the biggest difference to the total amount you repay to the lender and the amount you can invest to build a nest egg.

Think of the wealth you could create if instead of servicing a loan for 30 years, you made it your goal to pay the loan off in 20 years, then begin investing and making money. 

To set it straight – instead of shopping for a low rate and ignoring the term, you should be planning a much shorter term at a fair rate. 

I spoke to a dude who is high up at one of the major banks just the other day and suggested to him they advertise 15-year loans which would save customers hundreds of thousands. He replied, ‘But how would we make any money?’. 

The real number that we should ALL be trying to reduce is the ONLY number we can control – the number of years we’ve got the loan or what I like to call Debt-Time. 

The cheapest home loan is that which you pay the least amount of total interest on. The cheapest loan is therefore that loan with the shortest possible term at any given interest rate. It can be no other way. 

If and when rates go down, keep your repayment the same, pay more principal, save yourself a few years of having a mortgage on your shoulders. Use this time to get ahead. 

When you borrow, you want to be focused obsessively on calculating the number of years in debt then total interest paid, and finally, the interest rate. 

To hit your target and trash the non-income-producing loan in the shortest possible time, you must have a structure. 

The salary-earning bank staff don’t know and don’t care to know about structure and how to get it to work for their customers. Why would they care when they get paid regardless of if you succeed or not? 

Too many people I meet – some who don’t proceed with us because they are apparently mortgage experts too – DO NOT have the correct structure in place. 

Incidentally, these are the same people who think they can do the work of an accountant, too. 

They rob themselves but through ignorance, do not realise their mistakes so are none the wiser. Maybe that saying is true?

We talk about structure until we’re blue in the face. 

You can check out how blue my face goes if we catch up in person, but first, request a 10-minute intro call with me to find out if we’re the mortgage broker for you. 


Brodie Brown

Professional Mortgage Broker