Mortgage planning: Black art or science?

Many home buyers arrange a mortgage for a house by finding the best rate available, and fixing or accepting a floating rate for terms as long as 30 years. They then proceed to repay the mortgage at the same payment level for the next 30 (or however many) years.

This is a very expensive way of repaying a mortgage. At the end of the mortgage you may have paid three (or more!) times the original loan amount to the bank in mortgage payments. It's little wonder that banks are happy for lender to do this. They represent a safe and risk free income stream for the banks, and a financial disaster for the home buyer.

The key to reducing the cost of a mortgage is mortgage planning. Mortgage planning is the art of manipulating the mortgage repayment levels and frequency to best suit your own personal circumstances and the impacts today's dynamic financial markets have on your mortgage servicing costs.

There are many products and services that will show you how to repay your mortgage faster and save you money. Eg: BizzTools