If you’re serious about saving, you should look to your mortgage. After all, according to New Zealand finance writer Martin Hawes, the ‘mortgage has more scope for saving and adding to your net worth than any other area of your finances’ because most mortages cost hundreds of thousands of dollars, leading to ‘possibilities for making big savings’.
In his book Save Money on Your Mortgage, Hawes shows how loan size, loan period, interest rates, repayment size and frequency of repayments affect the overall cost of a mortgage. For instance, fortnightly repayments are more cost-effective than monthly repayments because banks calculate interest daily. The savings, however, are not as great as everyone thinks:
This is as hard as it gets in Save Money. Complex banking products, such as revolving credit and split loans, are deconstructed in easy-to-understand terms. Large font and small bodies of carefully structured text make the process of understanding mortgages as painless as possible, while simple case studies help flesh out abstract financial concepts:
Some of the advice, such as the ‘Sources of Home Loans’ section, can be irrelevant, being specific to the New Zealand market, but much of the book carries over to Australian home loans as well. In ‘Negotiate’, Hawes’ explanation on how banks think, act, and haggle is general enough to put any reader, no matter where they are, in the ‘strongest negotiating position possible’.
Those in search of an easy solution should look elsewhere, however; Save Money on Your Mortgage isn’t a debt-free-in-ten-years guarantee. Unlike some unscrupulous financial advice, it doesn’t make outrageous claims or offer miracles. Instead, it provides a lot of common sense:
- make the highest regular repayments your budget can afford,
- repay debt first (and save later),
- deal with the bank for the best home loan (and continue reassessing/dealing with them for the life of the loan) and
- tailor your home loan so that it suits you (and not the bank)
Hence Hawes’ Save Money on Your Mortgage is a down-to-earth resource for anyone who is thinking of buying a home or refinancing. It’s expert advice without the hidden commission fees.
Title: Save Money on Your Mortgage
RRP: $26.95 (or free from your local library)