Does the thought of school fees fill you with fear and anxiety? There is an easier way to handle the problem.
Pay your school fees from your mortgage without building debt into your family finances or increasing the size of your mortgage each year to pay for the fees.
Keep your fees out of your monthly income.
Your mortgage is your path to fee paying.
This article is an example of what you can do.
The example includes three children.
The oldest is five with a 3 and a 1 year old.
.
Step one

• Calculate the cost of education
• Assume the children go to public schools till year 6
• Prep, grades1 - 6
• Year seven they start at a private school
• The private school fees are $20,000 pa x seven years.
  
• The budget is $140,000 per child in today's dollars.
  
• Add $7,000 for books and uniform and $6,000 for a major trip
• Total budget is $153,000 per child.
  

At this point is important that you contact a specialist mortgage broker who can take the exact numbers you have relating to your personal situation and put them through the software and a mortgage calculator so a personal model can be built.
The process involves putting extra money into your mortgage and then withdrawing it as the fees become due.
Its applying compound interest principles.
Step two Three children ages 5yr,3ys 1yr

• Start prep at the age of five.
  
• Parents pay the primary school fees out of monthly income.
  

Step three When the 5yr old gets to year seven, school fees paid are in full on 1st Feb

• Payment first two years..
  ..
  ...
  $22,000 a year
• Payment next two years..
  ..
  ...
  $44,000 a year
• Payment next two years..
  ..
  ...
  $66,000 a year
• Payment next two years..
  ..
  ...
  $42,000 a year
• Payment next two years ..
  ..
  ..
  $22,000 a year

Step four Calculate your monthly payments of:

• Credit cards
• Personal Loans
• Car loans
• Store cards
• Lets assume you have $600 a month

Step Five Consolidate your mortgage to incorporate your debt.
You will need a mortgage broker (don't go to a bank) to do this as the set of up of the loan needs to cater for the school fees and the redraw facilities and at least one split in the loan.
Dont worry about the details now, the mortgage broker will take you through it.
Step Six

• Your extra payment over the minimum payment needs to be $1534 a month
• As you are currently paying $600 for debt, include this in the mortgage extra payment
• Your net payment to finance your three children though private school is $936 a month.
  $1534 - $600 = $936.
  
• Step seven Depending on the number of children and the cost of the selected school this step may not be needed.
  
• Re-daw $39,000 from your mortgage at the end of year two and invest in a positive cash flow property or investment that provides monthly returns of $400.
  

If you do this your commitment can drop by $400.
(Your investment surplus.
) Step seven At the start of each year you will redraw your school fees from your mortgage.
That's how you finance your three children through a top private school on less than $500 a month! It is critical that you have time with a mortgage broker to ensure that the mortgage structure will work in the long term for you and your budgeting numbers are accurate.
As an added bonus your original $159,000 mortgage will be paid out in less than 19 years even with $450,000 withdrawn for school fees.
Truly a mortgage is the ultimate wealth creation tool.