Piggy bank

How small amounts paid off your mortgage make a big difference

Piggy bank

Feel that paying your mortgage off in 10 years is unachievable? Even if you can’t achieve that goal,
there are huge benefits from making additional payments on your mortgage. When it comes to
additional repayments, every little bit helps.

I had a great chat with Pascale Helyar-Moray, founder of Grow My Money, on the podcast. And
when we weren’t getting super excited about shopping (I know, right – even this frugalista likes to
find a bargain), we got down to talking about compound interest.

This is the second time that Pascale has been a guest on my podcast. Last time, we talked about
gender pay inequality and her passion for increasing the superannuation balances of women. She
shared how she would talk about superannuation to women, and there would literally be people
crying when they realized that they didn’t have enough super to retire on.

I’m not surprised, because superannuation wasn’t designed with women in mind. It doesn’t account for time out of the workforce or the fact that women (in general) earn less than men.

Pascale was so passionate about super that she founded an affiliate rewards program called Super-Rewards. And now she’s rebranded it and pivoted it to focus on homeowners struggling to repay their mortgage.

From little repayments, big things grow

We’ve now had 13 interest rate rises in 18 months, with interest rates now at a 12-year high. I was
chatting recently with a guy at work who bought an apartment last year when interest rates were
low. His monthly repayments have now doubled. If you have a mortgage, this isn’t news to you, as
you are likely feeling this pain.  

It’s easy to just check out and think there isn’t anything you can do. But even little bits help. Say you put $10 additional repayments into your 30-year mortgage, where you are paying 6% per annum. That $10 is at least going to save you $10.60 – and that’s on the first year alone. You’re not likely to see that benefit right away, and in fact, looking at your bank statements, you might even feel like there’s no difference at all.

Have you ever watched a large apartment block being built? I’ve got a few happening near where I live. For months – sometimes years – it feels like nothing is happening. The focus is on setting the foundations, especially if there is a large underground car park. But then – boom! – suddenly, there is a whole new building there.

A similar phenomenon is at play when it comes to making additional repayments on your mortgage. It feels like you are repaying forever but slowly chipping away at the principal. It feels boring. ‘The thing about a mortgage is that you must find that money every month. It’s what I call mortgage monotony,’ said Pascale.

John Lennon famously said that ‘life is what happens when you are busy making other plans’. It’s similar to your mortgage. While you are going about your life, as you commit to making additional repayments – however large or small – eventually, that mortgage will come tumbling down.

How Grow My Money works to reduce your mortgage

Cost of living realities are curbing our discretionary spending, but the reality is that in our modern
economy, we still have to spend money: whether it’s on grocery shopping, Christmas presents or the dry cleaning for our work suit. Grow My Money allows people to earn cashback on their purchases, including from everyday things.

Grow My Money has 550 online and 1,000 participating in-store retailers, including eBay, Apple,
Freedom and Chemist Warehouse. You receive a cashback when you click through to these retailers from the Grow My Money site. For instance, if you want to buy perfume from Chemist Warehouse, first visit Grow My Money, search for Chemist Warehouse, and then click through to the shop. Make your purchase as usual, and (at the time of writing) earn up to 2.5% cashback.
The unique selling point of Grow My Money is that it’s the first product that allows people to put
cashback directly onto their mortgage. It’s easy to sign up and link to your mortgage account (it took me 5 minutes). And you can also add cards to it so that you can capture rewards from buying items online and earn cashback when shopping in-store.

The linked functionality matters as it makes it super easy to get funds out – and it happens regularly. For instance, with other affiliate marketing programs, you need to wait until your funds reach a certain threshold and then request a funds redraw – usually through another financial application such as PayPal. You then need to transfer the funds to your bank account. But with Grow My Money, it happens automatically. You don’t need to wait until you remember, and even small amounts can transfer across seamlessly.

The other unique feature of Grow My Money is that you can choose to contribute to your mortgage
OR your superannuation fund. You might, say, decide to contribute to your mortgage, but once that
is under control, focus on topping up your super.

It all adds up. Those small cashback savings all make a difference, whether it’s for shopping at Big W or purchasing airfare tickets for the Christmas holidays. Pascale has earned around $1,660 from using Super-Rewards/Grow My Money to make purchases. For many people, this is equivalent to one – maybe even two – mortgage repayments. Why not get a mortgage repayment for free by using Grow My Money?

This is a sponsored blog post for Grow My Money.

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