For many of us a mortgage remains a huge psychological barrier standing firmly in the way of financial freedom.
Being in debt forever has become a real possibility for homeowners particularly with falling house prices, big mortgages, and interest only loans to mention but a few. It has resulted in huge loans that we grudgingly spend most of our adult lives repaying. The term mortgage has it’s origins in France and literally translates into English as “death contract” and for many people that is exactly what it is – a legally binding contract that will not end until you are close to death. Of course the Irish see our homes as our castles and therefore the offer of a mortgage on a house is a cause for celebration. We view our home as an asset where of course it is not, it is the biggest, most expensive loan you will ever take on and the quicker it is repaid in full the better off financially you will be and the better your quality of life will become. Unless we win the lottery repaying a mortgage of say €300,000 in less than 20 years will be beyond our means as well as the willpower of most borrowers. You could work 8 days a week and live off baked beans until your loan is cleared but for the majority of us this is unrealistic. But what if you were mortgage free? What if you didn’t have that monthly burden which is actually lining your banks pockets? A mortgage is set up to drain your bank account and people don’t realise that they are in fact working for their bank. And they know that some people could repay their mortgage faster but they are not going to tell you how or help you in anyway because it cuts their ability to take money away from you for years on end. So, a bank wants you to keep paying them for decades but what if you repaid your mortgage in a fraction of the time? A study was completed a couple of years ago that followed 100 people from the start of their working career for 40 years, until they reached retirement age, and this is what they found:
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September 2015
Liam CrokeManaging Director of Harmonics Financial Categories |