A financial personal trainer at EnableMe, our guest columnist says that when it comes to paying off your mortgage, 10 is the new 30.


When you go to a bank to get a mortgage, many people default to the bank’s offer of a 30-year term. It’s in the bank’s interest for you to take your time, as they’ll make more money. But did you know that over 30 years, you’ll pay back almost three times what you borrowed?

EnableMe founder Hannah McQueen was a young accountant when she applied to get her first mortgage 11 years ago. Reluctant to pay three times the amount she wanted to borrow back to the bank, she approached the University of Auckland’s mathematics department. Together they devised a calculus formula to determine how to pay off your mortgage in the fastest time, with the lowest interest cost and the most flexibility. That’s now the basis of EnableMe’s programme, which in the past decade has helped thousands of Kiwis get in control and get ahead.

We work on these ratios: you can pay off your debt in eight years if it’s four times the size of your household income, or in 10-12 years if it’s five times the size. If it’s more like eight times, you’ve probably stretched yourself too far and we’d suggest selling your house.

That’s why we say 10 is the new 30! Most people can achieve more than they realise when they’re armed with an ambitious plan and expert advice, and when they’re accountable to someone other than their spouse.

Kiwis fritter away 15 percent of their income on things that don’t make them any happier or that they don’t notice they’re spending money on. Finding and eliminating the fritter in your spending provides a huge opportunity to make progress. You’d also be surprised at the savings you can make from efficient mortgage set-ups, tax structures and insurances.

We use behavioural science to work out what your spending personality is, then help you incorporate positive behaviours into your life. Most of us are shoppers rather than savers, but having a plan in place that includes things that make you happy and also gives you something to strive for can help you make progress and build wealth, while taking into account your spending habits.

You can go for the traditional approach of printing out your bank statements and working out where all your money has gone, but that only tells you what you’ve done, not what you’re capable of. We’re not in the business of putting people on financial deprivation diets – we want to help them get ahead while enjoying life.