Calculator AU3 · Rate Rise. The Australian Mortgage Handbook
Sell the toys: what it does to your mortgage
List what you own and don't use, with running costs like rego, insurance, storage and servicing. See the cash, the monthly money it frees up, and the years it takes off your loan three different ways.
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This calculator goes with Rate Rise. The Australian Mortgage Handbook by JP O'Connor. The book explains what the numbers mean and what to do next.
Selling something you don't use gives you two separate wins, and the smaller one gets all the attention. The cash is the small win. The bigger one is that from next month you stop paying for it: the rego, the insurance, the storage, the servicing, and the loan repayment if there's finance on it. That money keeps arriving every month for the rest of the loan.
The three lines in the table show what happens depending on what you do with each win. Most households do the first line. The last line is usually worth several times as much.
Don't forget the loan repayment
People remember to count rego and insurance and forget that paying out the finance frees up the repayment too. On the example figures that one line is worth two and a half years off the mortgage.
If you owe more than it's worth
This is common on caravans, boats and cars bought new. You have to cover the shortfall before the buyer gets clear title. It feels like a loss. Compare it with what the thing costs to keep. A $3,000 shortfall on something costing $11,000 a year pays for itself in about three months.
Get the payout figure, not the balance
The balance in your app isn't what it costs to clear the loan. Ask the lender for a written payout figure with an expiry date. It includes interest to the day and any discharge fee.
Check this one. Sale prices are guesses until someone pays. Check recent sold prices, not asking prices, for the same make, model and year. Anything with finance is likely registered on the Personal Property Securities Register. A search at ppsr.gov.au shows what a buyer will see.
Get the full handbook
Australia · 160 pages · JP O'Connor
Rate Rise.
The Australian Mortgage Handbook
Your repayment just went up. Here's where the money can come from.
What one 0.25% rise costs on your loan, by the month and the week
How to check your offset account is actually linked to your loan
How to ask your lender for a lower rate, and when refinancing really pays
Your right to a hardship arrangement, and the 21 days your lender has to answer
