Grown up maths

Had a pretty grown-up discussion with our ‘Priority Banking Consultant’ recently in the lead up to re-financing our mortgage. Picked up a couple of very interesting points:

1. You essentially pay off a lump sum on a fixed mortgage if you manage a portion of the mortgage on floating, concentrate on paying as much off that as you can, and at re-finance time drawn down the floating to the original amount by reducing the fixed.
   
   


2. The value of the property + the amount you’ve paid off your mortgage = something call equity. This is as good as cash to the bank when it comes to pulling together a deposit on another property.