Is your home a money maker or a money taker?

We often hear about Australians’ renowned love for property and home ownership. And that makes sense when you consider that one of the best feelings in the world is having a home that is fully paid off. Just ask anyone who has done so, and they will tell you it is an amazing feeling of relief, comfort, and security.

However, to accomplish this normally requires 20 to 30 years of paying a mortgage month in and month out and to own your home sooner most often requires strict budget management and putting every cent you can squeeze into your home loan on top of your required mortgage payments to reduce your principle as quickly as possible. This disciplined approach does work, but it still takes significant time and dedicated effort, and can be restrictive upon your lifestyle.

For many to most of us, this bread and water budgeting approach can be impractical and difficult. Not to mention – no fun. But what if there was another option where your lazy equity could actually help you pay your home off faster? What if this option didn’t require you to change your personal budget or diminish your lifestyle? Believe it or not, by tapping into the equity that has accumulated in your home, a whole new approach to enhanced home ownership becomes available.

There is a relatively little known tactic that a growing number of aspiring homeowners are now using that has the potential to dramatically reduce their mortgage term and the amount of money they have to pay to own their home outright.


If you have any equity in your property, you can most likely take advantage of repositioning that equity and empowering it to pay you a monthly income that can effectively be used as extra payments on your home loan potentially saving you big time and money. In the below example Jim & Ellen are able to save a staggering $180,000 in home loan repayments without changing their lifestyle or budget! How does it work? Well it is quite simple…


Let’s imagine that Jim & Ellen have a lovely home currently worth about $475,000 which they have a $300,000 P&I loan against at 7.0% interest. Jim is employed with a taxable income of $55k And Ellen is employed with a taxable income of $55k They have an annual lifestyle cost of around $58k (which doesn’t include their home loan repayments) They make payments on their P&I home loan of $2,320 per month and at this rate they will have their home loan paid off in full in 19 to 20 years if all goes well. Now let’s imagine that Jim & Ellen are able to use their equity to secure an additional $100k and they were able to use this $100k to hold a diverse range of managed fund-based investments that provide an average annual income return of 9% to 15% pa paid monthly or quarterly in arrears. And many of these investments also have a range of tax benefits enhancing the financial benefits to Jim & Ellen. And let’s assume they also had an efficient finance structure that allowed them to focus all of their investment income and tax savings towards increasing their home loan repayments. Now, Jim & Ellen are able to create substantial extra income that will go straight into their home loan repayment account on top of their normal payments they make. Everything else being equal, this will ultimately save Jim & Ellen a staggering $180,000 in interest repayments and six full years off the time it would have taken them to pay off their home. And the best news is that if Jim & Ellen do their homework right, then this strategy ultimately costs them nothing to do. That’s right. Doing this strategy with the right advice and the right investments allowed Jim & Ellen to do this without paying any service fees and their investment income covered all of their interest costs. How good is that? And this is done with only investing once, if they took advantage of expanding their investment portfolio over time (with no-out-of-pocket costs) they could make even more substantial savings. In fact, they could reduce their loan term and amount to pay by about HALF. This means that the equity in your home is actually allowing you to create income that can match you dollar for dollar on what you are paying. That’s like having another person helping you pay off your home by paying as much as you are, but without living with you. How great would that be? But what if you don’t have enough equity to secure an extra $100k for investing? Well, that is ok too because with minimum investment amounts starting at only $5,000, this option can still provide substantial benefits to the aspiring home-owner who wants to use their available lazy equity to help create extra cashflow for helping out with the bills or credit cards or increasing petrol prices. And as their equity increases, so can their investment holdings – all with no out of pocket costs. So, if you are currently dealing with a mortgage and you’d be interested in potentially making substantial savings on two of your most precious resources – time and money, then here is the option you should consider exploring.