# Accumulating wealth whilst paying off the mortgage



## hayate69 (11 July 2012)

I'm looking to buy my first home and have been doing my research on home loans and came across this product called *Aspire* from ***Company Name Removed*** and wanted to get everyones thoughts on it. Has anyone dealth with them before? Basically the loan has 3 components:

1. Home Loan (standard variable rate)
2. Investment Portfolio ASX 300
3. Gap Protection

Here's a brief rundown of it. The home loan is like any standard variable rate home loan that you obtain with any of the big 4 banks, however 30% of the monthly principal repayment will be automatically invested into the ASX 300 investment portfolio. This means you won't have to fork out extra money to invest in the ASX 300.  The income generated from the ASX 300 investment portfolio is used to pay down the loan so that you end up paying off your mortgage quicker.

However the thing that caught my attention was that should the investment portfolio perform poorly and is less than the outstanding loan balance at loan maturity then the built in Gap Protection will kick in and repay the difference. This In short it allows you to pay off their mortgage whilst simultaneously accumulate wealth for the long term with no downside risk.

Thoughts???

The company is called **Company Name Removed**: http://www.wealthmakerhomeloans.com.au/


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## skc (11 July 2012)

hayate69 said:


> I'm looking to buy my first home and have been doing my research on home loans and came across this product called *Aspire* from ***Company Name Removed*** and wanted to get everyones thoughts on it. Has anyone dealth with them before? Basically the loan has 3 components:
> 
> 1. Home Loan (standard variable rate)
> 2. Investment Portfolio ASX 300
> ...




Who pays for the "gap protection"?


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## hayate69 (11 July 2012)

skc said:


> Who pays for the "gap protection"?




I spoke to the broker and he said you have to pay for it.... $25 per $5000 borrowed. I'm thinking about borrowing $500,000 so that's going to cost me $2,500, which isn't too bad I guess, considering if another GFC comes alone you will be covered.


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## robusta (11 July 2012)

Seems almost too good to be true, I would want to take a very close look at the fine print for extra fees on transactions, also how leveraged are these guys? Could get messy if they go broke.


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## sinner (11 July 2012)

Crazy.

If you really wanted to do this, you can replicate by taking out a home loan and buy some instalment warrants. 

I assume Aspire is making you pay for the "privilege" of investing in these two products through them. Neither the loan nor the "gap protected index investment" is special and both are already completely accessible to the retail investor.


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## prawn_86 (11 July 2012)

The fact that the website is ***'d out means that it gets ASF's spam sense tingling


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## hayate69 (11 July 2012)

sinner said:


> Crazy.
> 
> If you really wanted to do this, you can replicate by taking out a home loan and buy some instalment warrants.
> 
> I assume Aspire is making you pay for the "privilege" of investing in these two products through them. Neither the loan nor the "gap protected index investment" is special and both are already completely accessible to the retail investor.




How would you replicate this with instalment warrants?


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## Joe Blow (11 July 2012)

prawn_86 said:


> The fact that the website is ***'d out means that it gets ASF's spam sense tingling




I added the URL to the banned words list as I noticed this person has been spamming this product at other forums today, including propertyinvesting.com. There was also a thread at Whirlpool forums started earlier today that has since been removed.

This person is not asking questions, he or she is promoting this product IMO.

*Edit:* I have run a database search and replace to remove the company name as well so this product can be discussed solely as a concept.


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## hayate69 (11 July 2012)

sinner said:


> Crazy.
> 
> If you really wanted to do this, you can replicate by taking out a home loan and buy some instalment warrants.
> 
> I assume Aspire is making you pay for the "privilege" of investing in these two products through them. Neither the loan nor the "gap protected index investment" is special and both are already completely accessible to the retail investor.




How would you access this? I am a retail investor looking to borrow $500,000 to purchase my first home.


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## Tyler Durden (11 July 2012)

Troll!


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## hayate69 (12 July 2012)

Tyler Durden said:


> Troll!




What is a troll?


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## hayate69 (12 July 2012)

sinner said:


> Crazy.
> 
> If you really wanted to do this, you can replicate by taking out a home loan and buy some instalment warrants.
> 
> I assume Aspire is making you pay for the "privilege" of investing in these two products through them. Neither the loan nor the "gap protected index investment" is special and both are already completely accessible to the retail investor.




With Aspire you have a loan with an embedded investment all at the same cost, i.e. the monthly repayment is the same as for a standard variable rate loan (after discounting). Whereas, with your idea you have a separate loan and instalment warrant where you are paying significantly more because you must pay both the loan off and the instalment warrant separately.


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## sinner (12 July 2012)

hayate69 said:


> With Aspire you have a loan with an embedded investment all at the same cost, i.e. the monthly repayment is the same as for a standard variable rate loan (after discounting). Whereas, with your idea you have a separate loan and instalment warrant where you are paying significantly more because you must pay both the loan off and the instalment warrant separately.




Wow! So Aspire is hooking you up with a deal better than you can get on the open market. Must be out of the goodness of their hearts.

I have no idea how you managed to calculate the cost as "significantly more". 

Nothing you can say will convince me this is not a crazy idea.


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## Junior (12 July 2012)

hayate69 said:


> With Aspire you have a loan with an embedded investment all at the same cost, i.e. the monthly repayment is the same as for a standard variable rate loan (after discounting). Whereas, with your idea you have a separate loan and instalment warrant where you are paying significantly more because you must pay both the loan off and the instalment warrant separately.




I suggest you focus on promoting this product elsewhere.  Most of the members here have a reasonable knowledge of financial products, and know that we could replicate this system at a low cost by going direct.


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