Mortgage Beater

Reporter: Nicolas Boot

Dennis Orrock is the $125 billion mortgage industry's public enemy number 1. He reckons he can shave $100,000 off most home loans, the banks don't want you to meet him. "Borrowers need to show the banks that they're in charge of the relationship they can save up to a $100,000 off their mortgage for their benefit not the banks" says Dennis.

He's General Manager of a website designed to beat the banks and lending institutions by simply paying an extra $7 a day off your mortgage that's an affordable $50 extra a week. "If you pay an extra $50 a week you'll save $100,000 in interest and 51/2 years on the loan term."

The banks don't want a one off fling with us borrowers they want us to sign up for a the long term. It's money in their hands we're paying more interest the longer the loan but it's a relationship we can sever easily and quickly. Instead of paying off your home in 25 years you can own it in 19. Maria Sprem's 30 year mortgage has been slashed in half and she's done it by paying an extra $651 a month off her home loan.

Yes! She'll own her pride and joy. A 1 bedroom unit outright in 13 years and 6 months and she'll take from the bank tens of thousands of dollars in interest. "Interest was the major issue it is so hard for people to get ahead these days because of the interest rates increasing and this is the only way we thought to do it by paying off a little extra so you are actually paying off the principal and not just the interest you'll never get ahead that way" says Maria.

"The only way to save money on a mortgage is by making extra repayments so that you are paying above the scheduled repayment timetable which means you are paying principal off not interest" says Dennis.

So how do you save $100,000?

"What you need to do is cut your monthly repayment in half and pay that fortnightly that will give you an extra months repayment per annum" says Dennis. On a $300,000 loan to be paid back over 25 years this is the payment schedule: Organize with your lender to make fortnightly payments instead of monthly - thats paying $1068 a fortnight plus the $100 extra you're paying off the loan. The interest saving is $100.407. Plus you'll cut 5 years and 5 months off your mortgage. In other words that home which would have taken 25 years to pay off will be paid off in 19 years and 7 months.

The important tip is depending on your loan contract, find the cheapest interest rate with the least charges that suit you. "If you are paying more than 7.5 percent your in a mugs game" says Dennis. Yes it's you the borrower that needs to call the shots.

"It's not the way it use to be you don't need to beg for a home loan anymore they have to beg for your business" adds Dennis.

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