Mortgage clarity, made personal

How the investment strategy supports mortgage reduction

See how available property equity, a 14% investment return assumption and quarterly additional payments work together in the Mortgage Zero model.

The investment-backed strategy

Put available equity to work against your mortgage.

Mortgage Zero models whether eligible property equity could be invested through a high-yield equity fund, with net investment proceeds paid into the mortgage every quarter while normal monthly repayments continue.

Model the strategyGet your complimentary report →
Investment return assumption14%per annum

Before borrowing costs, fees and tax.

01

Calculate available equity

Start with 80% of the property value, then subtract the existing mortgage balance.

Property value × 80% − mortgage
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02

Invest the available amount

The model assumes the available amount is funded through a separate investment loan and invested at 14% a year.

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03

Deduct borrowing costs

Interest on the investment loan is deducted from the gross investment return to calculate the modelled net proceeds.

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04

Apply additional income quarterly

Net proceeds are directed into the mortgage every quarter, in addition to the client’s normal monthly repayments.

Worked calculator example

How the numbers connect.

Using the default scenario currently shown in the Mortgage Zero calculator:

Property value$1,000,000
Existing mortgage$400,000
Available investment amount$400,000
Gross annual return at 14%$56,000
Annual borrowing cost at 6.1%− $24,400
Net annual mortgage contribution$31,600

What continues throughout the strategy?

  • The client continues making the normal monthly mortgage repayment.
  • The investment principal remains invested in this illustration.
  • The separate investment-loan balance and its interest cost remain.
  • Net investment proceeds are applied quarterly until the mortgage reaches zero.
  • The strategy is reviewed as rates, performance and circumstances change.

What the model does not include

  • Investment, establishment or advice fees
  • Tax or the deductibility of borrowing costs
  • Changes in mortgage or investment-loan rates
  • Repayment of the investment-loan principal
A better next step

See the model before you decide.

Mortgage Zero illustrates how mortgage structure and an investment component may work together. Results are not guaranteed, so suitability and assumptions must be understood before proceeding.

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“The best plan is the one you understand, can sustain and feel confident acting on.”