A mortgage redraw isn't tapping savings, it's borrowing more money. The speaker warns against using redraws for depreciating stuff like TVs and couches if you want to pay off your mortgage faster.
So whenever you call in or email in for a redraw, I just want to reframe that for you, because a lot of you think that it's my savings. Well, it is, but let me reframe it. Let's pretend you've got a $10,000 mortgage, and you then put your income into that mortgage, and let's say you're earning five grand, so your mortgage down to $5,000. You had five grand income come through. You have a $5,000 mortgage left. If you want to take out $3,000 to buy a TV or a couch or anything of that nature, you're literally going into debt for that three grand because your mortgage will go from five grand up to eight grand. So I know that your savings are sitting in a mortgage, which is the smartest place to put them, because you've got all your income saving you interest at 4% or 5%, which means it's earning you interest at 4 or 5%. That's perfect. But I don't want you falling into the trap of thinking, oh, I just redraw that money back out for stuff that goes down in value. So what I'm talking about here is your car loans, your TVs, your couches, all these sort of stuff, which as soon as you buy it, it's worth less than what you paid for it. So every single time you redraw, reframe in your mind, it's not my savings. I'm literally going into debt for this. I. I'm going to debt to redraw $2,500 to buy a plasma TV. I'm going to debt to redraw $1,500 to buy a couch. So you'll redraw every single time you send a redraw request through or make a phone call through us and your money coach, you're going further into debt. Now, we're here to try and get you out of debt. Obviously, you want to get out of debt. So the less redraws, the faster you have this house paid off and, and the quicker you can be debt free.
