Home Loan Interest Rate Creeping Up

For the last two years my home loan interest rate has been slowly creeping up. It started off around 3.89% and is now at 4.07% with one of the Big 4 banks. This has prompted me to look into other lenders to see what is on offer.

House Value: $450,000

Current Mortgage Balance: $284,000

4.07% Variable Principle and Interest 

$395 annual package fee

2 years into a 30 year loan. (planning on paying off loan over next 5/6 years with extra payments)

After contacting my current lender they have agreed to drop interest rate down from 4.07% to 3.92%

1 Email = Savings of $426 per year! not bad for 2 minutes of work.

I also search for best deal online.homeloaninterst

Best rate: 3.59% Variable P/I no offset but redraw. $0 annual fees

If I switch to this online lender, I would be saving $937 per year in interest + $395 annual fee = $1,332 per year!

There are a few fees in switching lenders to consider, discharge fee for my current loan $300, property title fee $179 and potential settlement fee $150.

I would also need to switch my everyday bank account over to avoid monthly fees to a fee-free online account. This would also involve contacting all direct debits to switch over.

If I switched over I wouldn’t have a offset account, this shouldn’t be a issue as I plan to pay the loan off early and never want to create a Investment Property out of it.

Should I do the paper work and make the switch?

What your current interest rate?

 

 

 

 

 

 

Margaret River Family Holiday September 2017

 

A throwback to last year and our first holiday away since the birth of our daughter 6 months earlier.

Our accommodation was a 2 bed cabin in a caravan park on the river. The cabin averaged out to $71/night which in Margaret River is 30% cheaper then the normal nightly rate. Saving is $200 over the week stay.

The cabin is part of holiday home program offered through Mr FMT’s employer. For $150/year membership, has paid for itself in the first holiday and we still have future holidays planned.

We went out for lunch most days enjoying breweries and wineries in the south west region.

Most nights we either cooked or brought back some takeaway to our cabin because nights are difficult enough with a new baby.

Most of our entertainment was free- bushwalking, beautiful beaches, cheese and chocolate tastings. We did pay to go down some caves which we hadn’t done before and was good fun.

Accommodation $500 for 7 days

Expenses $990 including food, transportation, entertainment.

Total $1,490 $212/family/day

Our Margaret River Trip wasn’t the cheapest week away but was a well earn rest after a sleepless 6 months as new parents.

What do you think of Margaret River? Has your workplace got any holiday home or similar programs?

3rd Quarter Update $-288,200

End of September means the end of the 3rd quarter of 2018, which is a good chance to look over our spending.

We had a big bump in income due to a tax return and a small first pay from Mrs FMT’s small business.

Total Income $26,564 July to Sept

After a great second quarter of saving, we ended up spending alot of money on planned house repairs which we had put off for the last 2 years. Mostly necessary repairs, which comes with owning a 1960’s house on the beach.

Total Spend on Home Repairs $14,364 July to Sept

As much as I wish this was money put onto the homeloan, the work is now mostly done with last part of the repairs coming into the 4th quarter spending.

Even with the home repairs we managed to pay down some extra money on the home loan.

Total Extra Payments on Home Loan $5,000 July to Sept

Current Home Loan balance at $-288,000

With the major home repairs costs out of the way for the immediate future, I hope to get back to paying down extra on the loan.

Target for end of 2018 is to pay down the home loan to under $280,000

What are your thoughts? How do you deal with Home Maintenance costs and trying to reach FI?

Paying a 30 year mortgage in 5 years!

Since discovering FI we have sold our money-hungry Investment Properties. So we can focus on paying off our own mortgage then we can invest into low cost index funds.

We started aggressively paying off our mortgage May 2018 – Planning on paying off our 30 Year mortgage in 5-6 Years.

By putting every spare dollar into the loan, we will need less income in retirement because we won’t have monthly mortgage payments.

Purchase Price: $470,000 September 2016

Minimum payment $1806/month

Aggressive Payments 5 Years: May 2018 $303,500

$5,575.73 Monthly

Aggressive Payments 6 Years: May 2018 $303,500

$4,734.50 Monthly

Average Payments as of August 2018

$5002.75

(This is a bit distorted due to our tax return)

We are currently on one income as Mrs FMT is staying at home with our daughter.

So far it looks like we are on track to reach our target of paying our 30 year mortgage in 5-6 years!

What you planning to do with your mortgage? Are you paying the minimum off your loan so you can invest?

 

Introduction to FI

FI or FIRE stands for Financial Independence/Financial Independence Retire Early.

The concept is spending less and saving more, investing the savings to create income to live on in the future.

One of the original bloggers in this space is Mr Money Mustache, in his post Shockingly Simple Math Behind Early Retirement he explains how easy it can be by spending less and investing to retire in under 10 years.

50% savings rate is the target for most FI people.

This seems huge compared to the 10% most average people save. Though it can be done by cutting a lot of the waste and unnecessary crap out of our first world lives.

Cost cutting ideas:

  • Cooking at home
  • Packing lunches for work
  • Buying cheap used cars opposed to loan or leasing new
  • Buying or renting affordable houses instead of million dollar mansions
  • Biking occasionally instead of driving car
  • Swapping Netflix for Foxtel
  • Optimizing mobile phone plans
  • Travel hacking holidays with points

More reading on FI can be found at links below –

Bogleheads Australia

Barefoot Investor

Aussie Firebug

Strong Money Australia

Vanguard Australia

USA based content

ChooseFI

Jim Collins Stock Series

Mr Money Mustache

Millennial Revolution

Share your favourite FI content in the comments below.

 

Albany Family Holiday

Albany is a small city, located on the south coast of Western Australia, 414km from Perth. It reminds me of a larger version of Esperance and has plenty of history, things to do and places to eat.

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We stayed in a 3 bedroom house on Mount Merivale, overlooking Princess Royal Harbour. The house is part of holiday home program offered through Mr FMT’s employer. For $150/year membership it offers discounted holiday homes around Australia and New Zealand.

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Our days were spent enjoying at the beaches, national parks and playgrounds. On the rainy days we went to the swimming pool, local museums such as Cheynes Beach Whaling Station, National Anzac Centre, Princess Royal Fortress and Museum of the Great Southern.

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Fun fact: Albany was the first European settlement established in Western Australia. It was settled three years before the Swan River Colony (Perth) was claimed in 1829.

Some of the National Parks we visited during our stay were Two People National Park (Little Beach), Tornidirrup National Park (The Gap), Williams Bay National Park (Green Pools and Elephant Rocks, Denmark)

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We also took our daughter to Old Marron Farm, which is a animal farm to cuddle the guinea pigs, rabbits, ponies, pigs, and horses. To treat ourselves, we went to local cheese and chocolate factory.

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Fun fact: Albany whaling station was Australia’s last whaling station to close in 1978.

Most dinners we enjoyed home cooked meals, a couple nights we had takeaway, going to a restaurant for dinner with a toddler isn’t super fun. Half of our lunches we ate out at local breweries or cafes.

Albany has all the beaches and national parks of Esperance but is a couple hours away. We will definitely be back to explore more, hopefully in summer next time.

Accommodation: 7 days $410

Spending  Money:  $810 including two car travel days. 

Total $1,220 $174/day

Esperance December 2017

Esperance is a lovely beach town, it is just a long way from anywhere.

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Located 714km South East of Perth, it takes a full day’s travel each way, but with 105 island and countless secluded bays and national parks it makes for a rewarding trip.

We stayed in a 3 bedroom house right on the foreshore in the centre of town, only a short walk to the Jetty and Coffee van. The house is part of holiday home program offered through Mr FMT’s employer. For $150/year membership it offers discounted holiday homes around Australia and New Zealand.

Our days were spent enjoying at the beaches and parks, only on a rainy day we spent the morning at the local swimming pool.

Most dinners we enjoyed home cooked meals, only going out one night to the pub and once to have a easy Chinese takeaway before out drive back home.img_6377

The beaches are amazing and if Esperance was a few hours closer I imagine we would spend alot more time there.

Accommodation: 7 days $400

Spending  Money:  $793 including two car travel days. 

Total $1,193 $170/day