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90 Marine Terrace Fremantle, WA, 6160

Tips for paying off massive mortgages

We’ve been writing a lot of $2m ++ mortgages for self-employed people and highly paid specialist employees. 

It doesn’t matter if your company is making $500k profit or you and your wife are paid more than that as sought-after professionals.

$2m is a HUGE amount and a challenging mountain to climb.

Remember that any non-tax deductible lending is repaid with after-tax money. 

It pays to always think in NET or after tax dollars. 

Remember also that with high incomes, typically comes higher expenses. 

Unless you’re a Spring Cleaner or a Superstar, spending is relative to income. 

So despite the bigger income, in the end, most of our Clients will face the same financial crunch that our Clients earning <$100,000 face. 

And potentially, at least a couple of decades with a hefty, pain in the arse mortgage. 

Decades. There, I said it again.

Here’s what I advise: break the mortgage up into “bite sized chunks”. 

It’s human nature that we shirk, avoid, ignore and ultimately do not achieve many of our biggest life-goals because we don’t have the ability to break them up into smaller parts. 

(quick tip on how to eat an elephant: think of the importance of achieving the outcome, rather than the crap you may have to go through to achieve it.)

Here’s a few ideas for your mortgage(s):

  • Use a structured repayment plan
  • Use a proper loan structure. Ask me<<
  • Use a debt-recycling structure, if you’ve got the equity
  • Divert rental income to mortgage repayments
  • Use “split” loans (part fixed and variable) but be accurate/thoughtful with the amounts, not arbitrary like 50/50
  • Set up repayments based on a calculated set-year repayment amount 
  • Use a spreadsheet and review each month
  • Pay your accountant to help you and hold you accountable

We’ve completed hundreds of transactions and from experience, interest rate chasing does sweet FA to reduce the duration of the loan. 

Read pages 61-70 of “Millionaire Mortgage Secrets” to refresh yourself on what I’m talking about. 

Increased debt-time means increased interest cost, means increased total cost of borrowing. This means delayed and lost investment time because your cash is tied up in mortgage payments. Wheel spinning. 

Low interest rate means a lower repayment and your hard-earned going into the hands of someone else.

High earners must remain acutely focussed on active repayment of the non-tax-deductibles. 

We recently declined to help a very highly paid mining specialist who has been paid more than $500,000 per year for the last 10-years but has only made the minimum mortgage repayments on their place in Cottesloe. 

Why? Because they didn’t really want to make any changes to the way they manage their finances. You should have seen the finger pointing at the meeting. 

We can’t help you if you don’t want to help yourself. Their three kids will be quite shocked when they realise their parents have left them virtually nothing! What a waste.

Ask me about the structures we implement for our high-income Clients by requesting a 10-minute, Introductory Finance Consultation with me ==>HERE.

We specialise in multi-property, non-cross secured (multi-bank) lending, complex, self-employed, development and commercial finance. Portfolio restructuring and rebalancing is another area we excel at. First and next home buyers wanting the education and top service are also most welcome. 

Book a slot today to avoid disappointment.

Brodie Brown

Professional Mortgage Broker