Warning for borrowers: your lender is not your adviser

Warning for borrowers: your lender is not your adviser

Dave Rae

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One in five older working Australians expects to retire with a mortgage, according to new research conducted by REST Industry Super. While this can be attributed to a number of factors, one key reason is a reliance on lenders telling you what you can borrow.

To avoid ending up a statistic, make sure you understand this:

  • Your lender will approve the maximum amount you can borrow – not how much you should borrow
  • Your lender will tell you the regular minimum repayments you have to make – not the regular repayments you should make

A 30 year loan will take 30 years to pay off if you only ever make the minimum repayments. So if you are taking one of these out in your 40’s…

The government’s Moneysmart website is a terrific resource to help you better understand all aspects of money including borrowing and its mortgage calculator can help you work out how to pay your home off sooner.

Combined with some smart money saving tips and you can get on the right track to being mortgage-free in retirement.

Use these tools to do your own research or get some advice from a good adviser or mortgage broker.

Dave Rae is a director, owner, and Certified Financial Planner at DPR Accountants and Advisers. He is a self-managed superannuation fund specialist adviser and works with clients to explore their goals and help them to build financial roadmaps to reach these. Dave co-founded DPR Accountants and Advisers in 2014 and has over 15 years’ experience in the financial services industry. He features on No More Practice’s The Investment Series 3 – The Philosophy Series where he provides financial advice to his client and helps him to understand his financial decision-making preferences.


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