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ISCOVER
Staff Reporter
One fund manager has launched a new product that it hopes will help borrowers create wealth while paying off their mortgage.
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Last week, Wealth Maker Home Loans unveiled its Aspire product to the market.
According to the company’s managing director, Michael McAlary, the new product has three components: a home loan, an investment and gap protection.
“The loan is the same as a standard variable principal and interest loan, so the repayments are the same,” Mr McAlary told The Adviser. “The investment is an S&P/ASX300 indexed managed fund. Gap protection covers any shortfall at loan maturity between the outstanding loan balance and investment value. The customer will always own their property at the end of the loan term.”
Mr McAlary said that as the home owner pays off their mortgage, a portion of their payment is invested in an ASX 300 company, providing the borrowers with an investment portfolio.
“Aspire may be viewed as an investment plan or “forced savings”, as each month a portion of the loan repayment is invested for the customer. The customer is simultaneously paying off their loan and investing,” he said.
“With Aspire, at the end of the loan term the customer will own their property and will likely have an investment portfolio, or they can pay off their loan early without any extra repayments. Comparatively, the customer who only has a standard home loan gets to own their property with no opportunity of investment upside.”
