Aussie John Symond’s tips & traps

“One of the worst things consumers can do is consolidate their’ bad money’ – credit cards, car loans etc. - and roll it into their home loan,” warns Chairman of Aussie Home Loans, John Symond speaking exclusively to Money Confessions.

“While this might save a couple of hundred dollars a month you could end up adding $50,000 in interest. Because what you’re doing is turning short-term bad debt into a 20-30 year facility at a lower rate and at the same time doubling or trebling the interest component,” he said.

When Money Confessions asked Symond for his money management tips the first place he went to was what he maintains is an increasingly common trap that consumers are falling into due to poor advice.

He spoke of one consumer who was poorly advised to roll her second had car repayments into her mortgage. “In 20 years time she won’t even own the car and yet she’ll still be paying it off,” said Symond.

So Tip One: Don’t focus only on lowering monthly repayments. Take into consideration the interest component.

Tip Two: If manageable try to keep up current mortgage repayments, despite the rate cuts. If you need to drop them do so by the most minimum amount possible.

Tip Three: Shift to fortnightly instead of monthly repayments. This works out at 26 payments per year and one full calendar month extra per annum.

Tip Four: Whenever possible find an extra $10 a fortnight for mortgage repayments. That’s going to add up to $20,000 to $30,000 in interest saving.

Tip Five: Do a financial health check yearly.

“It’s beyond me why people are so apathetic and still have credit cards that are charging 18% - 20% or even worse, store cards charging 28% - 30%,” said Symond.

“It’s not just a cut in interest rates that will save you money in the long run. It’s the way you conduct your home loan payments and financial matters.”