Pay Off Your Home in 10 Years

Hello,

I read a book about property investing by Konrad Bobilak and there is a chapter on how pay your house off in 10 years with no extra payments. The deal is using a 55-day credit card, keeping all your earnings in an offset home loan account, using your credit card daily, and setting up an automatic transfer before 55 days to pay back from the offset to the credit card. But in your book you do not mention this. I am confused -- what should I do to pay off my mortgage quicker?

Des

Hi Des,

What you’re referring to is a ‘sweeper strategy’: parking your salary in your offset account, spending everything on a credit card, and then sweeping your entire credit card balance clean before your credit card repayment is due.

It looks awesome on a spreadsheet, but I’ve seen it harm more people than it helps. Reason being, most people end up spending too much on the credit card and get whacked with a backdated interest bill. Then, instead of saving interest you’re paying it.

Here’s you: “I won’t miss a repayment … ever.”

Here’s me: “You probably will at some stage. The Australian Bureau of Statistics suggests that about two-thirds of credit card holders miss a repayment at least once a year.”

My advice?

Get an ultra-low-cost variable home loan, forget the credit cards, and focus on making extra repayments each month.

Scott