How To Beat The Banks By Not Paying Compound Interest On A Variable Rate

If you have a mortgage and loans, the best way to beat the banks is to stop playing their game. The reason why banks want you to pay mortgage payments monthly, is because they rely upon compound interest which accrues over the course of that thirty days. When you make a payment, eg $1000, 70% of that is interest and 30% of that is on the capital of the loan. Essentially, you are paying $700 in interest per month.

How do you beat them? You need to stop the compound interest from accruing. If you pay $1000/month, pay an extra $30 and pay one dollar/day to your bank. Compound interest goes up over the course of the month and when you make the payment, it goes down, 70%.

If you pay one dollar per day, the compound interest goes up on the first day you make the payment and then goes back down to zero. If you do this for 30 days, at the end of the 30 days the mortgage payment you made will be 100% on the capital that you have on that loan and you will pay zero in interest. And you will end up cutting your mortgage from about 25 years to about 5 years.

Banks and various other people want you to be locked into a fixed interest rate because then you can’t apply this strategy. The only way this can work is on a variable rate because it drops the interest rate to zero every day until the end of the month when you pay your mortgage payment. The banks don’t make any money and you pay off your mortgage in a fifth of the time.

You can do this with credit cards, car loans and anything that has a variable interest rate. Banks can’t stop you from doing this but they will try. They don’t like people doing this and they don’t want people to have this knowledge. They tell people to go and find a better interest rate when the best solution is to not pay any interest. Nobody out there needs to be paying any interest.

Get smarter – be better than the banks. 90% of the population doesn’t even know what mortgage stands for. It’s a Latin word and one of the reasons they stopped teaching Latin in schools. They don’t want people to understand. Most reserve bank and banking charters are written in Latin.

Mort = death (mortuary) and gage = pledge. A mortgage is essentially a death pledge between you and the bank. They never expect you to pay it off. It’s modern-day indenture slavery.

My reason for doing this post today to educate people that there is a better way, a smarter way and an easier way to beat the banks and get your home owned a lot quicker than what they allow you to do. Obviously the banks don’t like this and I have tried to say this stuff before and get my knowledge out to the world but my comments get deleted.

Banks will try to stop you. They will send cease and desist letters and try to stop you from doing it but at the end of the day, they can’t. If you receive a cease and desist letter once you start paying one dollar a day, ignore it, rip it up and put it in the bin. What are they going to do? Take you to court and say ‘Your honour, they are paying too much?’ They would get laughed out of court.

If you want to beat the banks, beat them by not paying compound interest.

Peter Johns, Australia