The sum looked absurd to Hannah McQueen. She had taken out a mortgage of $360,000, and with the interest rates of the day she worked out she would hand the bank close to $1 million before it was cleared. “I thought this was madness,” she told NZ Adviser.
She was a chartered accountant, so she did what an accountant does and went to the bank with questions. The answers did not help. She could shorten the loan term, but repayments would climb. She could make a lump-sum payment of 5% without penalty, but could not draw that money back out. Or she could put a slice of the loan on a floating rate far higher than the rest.
None of that suited her. What she wanted was a loan structured so that it cost the least in interest, stayed flexible, and let her reach her equity again. So she rang the University of Auckland and asked for the people who teach calculus.
A few months of calculus
McQueen has described the result in her own words. “A few months and pages of calculus later,” she wrote in a Mindfood column, she had a formula that, in essence, would save an amount in interest equal to the mortgage itself. She told NZ Adviser it cut nearly $350,000 from the cost of her loan over its lifetime. She patented it.
There was a catch, and she was the first to say so. A formula for paying a mortgage faster assumes something is left over each month to put against it. “I now had an amazing formula but no cash surplus to maximise my formula,” she said. Accountants write budgets for a living, she added, yet she struggled to keep to her own.
That gap is where her business began. The University of Auckland’s alumni profile says she launched EnableMe at 27, as a personal financial training service. By its account she had left school early, started at university at 17 and finished a Masters in Taxation, then joined KPMG before moving to a mortgage consulting firm. She decided she would rather help people get out of debt than into it. When she and a colleague pitched the idea to their boss, he fired them both.
The profile says the company was about to mark its tenth anniversary and had 10 offices around the country. McQueen told NZ Adviser she started it about 16 years before that interview, wanting to understand the behaviour behind financial success and not only financial literacy. She said the firm’s clients see a 300% increase in savings and clear their mortgages in a decade instead of three.
Her advice, given in January 2023 as interest rates were rising, was practical. When rates climb and costs stretch, the surplus shrinks, she said, so people should reset their spending plan, restructure the mortgage and set different income targets. She also urged people to work with someone they are not emotionally connected to, because that person sees the numbers differently.
Sources
- Expert wants to help Kiwis to get smart with money – NZ Adviser
- Hannah McQueen – University of Auckland 40 Under 40
- Pretty Powerful Series: Hannah McQueen – Mindfood
