Paul and Sharon purchased a house a year ago when they got married. They both work full time, but would like to start a family. Paul and Sharon spoke to us and asked for advice on how they could have a family on one wage and also meet the mortgage payments. We worked out together with them what their mortgage repayments would need to be for them to live comfortably on one wage, as Sharon was not sure if she would return to work after she had the baby or would wait 5 years. We refinanced Paul and Sharon’s loan to a loan which had dynamic repayments.
Dynamic repayments allow you to put extra monies on your loan, but rather than reduce the loan term ( meaning you pay off your loan quicker 15 years instead of 24 years etc), it keeps the term/years the same while reducing the monthly payment amount (meaning your monthly repayment reduces when you put on extra funds).
Paul and Sharon are very happy, they now know that when their payment reduces to their target amount, they can start having a family. So every month they pay as much as they can on their loan and the next month their loan payment is less. Paul said the best feature of the loan was that they still had redraw and an offset account, so they were not concerned about keeping funds aside if anything happened, they could just redraw from the extra funds on their loan. Sharon, said it was fantastic, because they could see the reduced payment every month, which kept them motivated and on track.