Save on your mortgage

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Imagine a scheme that will save you $100,000 off your mortgage. With interest rates continuing to rise meet the man who says he can beat the banks and guarantee exactly that.

Dennis Orrock is the $125 billion mortgage industry's Public Enemy Number One. He claims he can shave $100,000 off most home loans.

"Borrowers need to show the banks that they're in charge of the relationship. They can save up to a $100,000 off their mortgage for their benefit not the banks."

Mr Orrock is General Manager of infochoice.com.au -- a website designed to beat the banks and lending institutions by simply paying an extra $7 a day off your mortgage. That amounts to an affordable $50 extra a week.

"If you pay an extra $50 a week you'll save $100,000 in interest and five and a half years on the loan term."

The banks do not want a one-off fling with borrowers, they want to sign you up for a the long term. The longer the loan, the more interest you pay.

However, it is a relationship we can sever easily and quickly. Instead of paying off your home in 25 years you can own it in 19.

Maria Sprem's 30-year mortgage has been slashed in half and she has done it by paying an extra $651 a month off her home loan.

Soon she will own her pride and joy. A one-bedroom unit outright in 13 years and six months and she will take from the bank tens of thousands of dollars in interest.

"Interest was the major issue. It is so hard for people to get ahead these days because of the interest rates increasing," she said.

Mr Orrock agrees: "The only way to save money on a mortgage is by making extra repayments so that you are paying above the scheduled repayment timetable which means you are paying principal off not interest."

So how exactly do you save $100,000?

"What you need to do is cut your monthly repayment in half and pay that fortnightly that will give you an extra months repayment per annum."

On a $300,000 loan to be paid back over 25 years this is the payment schedule:

• Organize with your lender to make fortnightly payments instead of monthly -- so you pay $1068 a fortnight plus the $100 extra you are paying off the loan.
• The interest saving is $100.407.
• Plus you'll cut five years and five months off your mortgage.
• In other words that home which would have taken 25 years to pay off will be paid off in 19 years and seven months.

The important tip depends on your loan contract. Find the cheapest interest rate with the least charges that suit you.

"If you are paying more than 7.5 percent you're in a mugs game" said Mr Orrock.

So clearly it is you, the borrower, that needs to call the shots.

“It's not the way it used to be. You don't need to beg for a home loan anymore they have to beg for your business."

For more information visit: infochoice.com.au