If, of course, there had not been a sharp change in exchange rate, John and Sandra Alpe would still have 19 years to pay off their mortgage.
Instead, they happily retired, living mortgage-free in their five-bedroom home in Oakland, surrounded by a growing flock of grandchildren for whom they have all the time in the world.
John, 65, retired from his full-time job as a Baptist pastor a few weeks ago. Sandra resigned as a part-time pastor, which meant they could both move north from Christchurch.
RICKY WILSON / STAFF
Ria Akuhata lives in a van to pay off her mortgage faster
They believe that the significant reduction in the maturity of the loan is due to the change in the structure of the loan, the reduction of unnecessary expenses and the implementation of the plan.
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Financial Advice New Zealand chief executive Katrina Shanks says many of us “get mortgages and insurance and then don’t review them regularly to make sure they’re still fit for purpose.”
While this doesn’t work for everyone, “clients of financial advisors often find they can save a little.” Small changes can have the biggest changes, she says, for example:
- have a savings plan
- control your money using different bank accounts for different expenses
- regularly reviewing what and where you are spending, and determining if these expenses are a priority
- effective structuring of mortgages
- getting the right insurance
The Alps followed their advice from New Zealand Home Loans (NZHL), which State-owned through the parent company Kiwi Group Holdings, which also owns KiwiBank…
John said their loan was “a 25-year mortgage six years ago. With standard payments, we would still have 19 years left. “
At the time, their financial situation was satisfactory – the Langholm house was rented out and they lived in a two-bedroom apartment in Ilam, Christchurch, not far from their ministry. They downsized a 285-square-meter four-bedroom home in Brooklands after it found itself in the red zone after the Christchurch earthquake.
They stretched out financially to buy rental properties in Oakland, planning to eventually retire there. “We always planned to return to Auckland: 24 years ago we left as a pastor for Christchurch.”
John says he considers the decision to buy a lease in Oakland “a factor of God.” He says that if they had waited, they might not have been able to afford to buy there now, as house prices have soared.
But the couple did not understand that they could pay off their debt faster. “The banks don’t tell you anything. A thousand paid out on this end is like $ 15,000 on the other end. “
He says he and Sandra never spent too much money, but they made the extra effort to live within their means, dine less outside the house, and didn’t do things like buying new furniture. They deposited all of Sandra’s salary and 20 percent of John’s salary in a savings account, and all of their accounts were offset against the loan.
They were shown that they could save money “if we wanted to,” despite the fact that they did not have a high income. “When he [Yates] after analyzing our finances, he told us that we can save, and I found it hard to believe. “
John believes the system they signed up saved between $ 100,000 and $ 150,000 in interest payments, and the annual review kept them on track.
John says he would probably still work if he still had a mortgage: “It’s a noose.”
Instead, after several weeks of retirement, he “unpacks the boxes.” The house is large enough for the two children of the Alps and their partners to live with.
“The family needs help to get the deposit, so this is a win-win for us,” says John. “We have time with two grandchildren and it helps them.”
Living with two grandchildren, his daughter’s 18-month-old son, and a newborn son was “insanely busy.”
“It starts early in the morning. I got up at 4.30 this morning and my daughter and her husband got up to go to physical education class before he went to work.
“Something is happening all the time. He’s busy, which is great. We love it. It couldn’t have been better for us. We had a 10 year difference. We now have the opportunity to truly reunite and enjoy each other’s company.
“My wife is delighted with two grandchildren. And our other son is due to have a baby in October. They are just 15 minutes away. “
Yates said many people were unaware of their income and expenses, and what they were capable of.
“We work with mid-New Zealand, not necessarily high-end clients. We’re dealing with your regular mom and dad Kiwi.