Using the power of amortisation for good, Jinesh Vohra

I spend a lot of time talking about how to create debt for consumers. I do it because I believe that, when done right, debt can be beneficial to all parties involved, like a mortgage that generates wealth for the middle classes through property ownership. But that doesn’t lessen the fact that debt carries a cost, a cost that is now quickly rising. We know that mortgage rates are on the up, because it’s on every other newspaper headline these days, but what’s harder to ascertain is what we can do about that - other than building a time machine to take us back to when houses were cheaper.

Except, there are other ways.

It’s just not in the interest of lenders to make them obvious. Which is why it sometimes takes an outsider to disrupt the status quo. Enter, Jinesh Vohra and Sprive, the app that helps you over pay your monthly mortgage, turning the power of compounding interest in your favour for once.

“Being mortgage free should be achievable for everyone… it really changes your life”

Jinesh posts regularly on LinkedIn and is open to DMs, so follow his account and do reach out if you have questions

As mentioned in the show, your first port of call if you want to check out the app is your friendly local App Store (Apple) or (Android)

If it is just information you’re after, then Sprive’s home page is where it is likely to be https://sprive.com/ And you don’t take their word for it, it seems like every week there’s a new letter in the press, or update online, from a happy customer (~40% of SpriveApp's active user growth was from customer referrals).

You can learn more about myself, Brendan le Grange, on my LinkedIn page (feel free to connect), my action-adventure novels are on Amazon, some versions even for free, and my work with ConfirmU and our gamified psychometric scores is at https://confirmu.com/ and on episode 24 of this very show https://www.howtolendmoneytostrangers.show/episodes/episode-24

If you have any feedback or questions, or if you would like to participate in the show, please feel free to reach out to me via the contact page on this site.

Regards,

Brendan

The full written transcript, with timestamps, is below:

Jinesh Vohra 0:00

I'm a firm believer of trying to be consumer-led.

Being in the corporate world, sometimes I was frustrated about how long it took to like bring about material change. But when you're starting from scratch you've got a clean sheet design, you have a vision in mind, and there's a smaller team so decisions can get made a lot more quickly.

And it's given the users a lot of control, law, transparency, and helping them ultimately save money on their mortgage and pay it off faster, especially with interest rates rising, that number is just going to get bigger and bigger, we can challenge your mortgage every single day.

Brendan Le Grange 0:38

Get ready because there's a little maths test coming up.

So here's the scenario: you have just taken out a mortgage for £250,000 to be paid over the next 25 years at an interest rate of 4.5%. Congratulations. You now need to pay your lender £1,390 every month. But that's okay, it's worth it. So at the end of the first month, you hand them your money with a smile on your face.

This is where a maths test arrives. If you owed the bank £250,000 and then you pay them £1,390 pounds, how much do you owe them now?

Well, what we need to do is work out how much of that payment will go against the principle owed. It won't be the full £1,390, the lender does need to earn a little interest, but how much of that first payment ends up chipping away at the balance owed? Maybe it's 90% to principal, 10% to interest? No, it's not. Maybe it's 80:20?

No, it's not even 50:50. In this scenario, two thirds of the first payment goes to interest. And so, while you've handed the bank £1,390, the amount you owe has only decreased by £452. That's the power of cumulative interest. It starts really, really slow. But each little chip builds upon itself so that, with the monthly repayments held steady and the balance falling and falling and falling, a smaller smaller portion goes towards interest each payment. Until, with about nine years to go, that ratio has flipped. And now two thirds of your payment is going against principal.

Right. Now, I usually talk about this concept to lenders to showcase the value of payment holidays and loan top ups. But today's guest saw a different opportunity within the annuity curves. Because you can also use that exponential power for good.

In our scenario paid strictly to contract, the £250,000 mortgage would actually cost us £417,000 over its lifetime, £167,000 of which is interest. But if we were to increase our monthly repayments, let's say to a nice round £1,500 We would pay our mortgage or three years and two months early and save £24,000 on that interest bill. So an 8% increase in our monthly budget will save us 14% of our total interest bill. And that's allowed.

Welcome to How to Lend Money to Strangers, with Brendan le Grange.

Cool, well, Jinesh Vohra, CEO and co-founder of Sprive, welcome to How to Lend Money to Strangers. As the title suggests, I'm normally speaking to people who are, in one way or another, creating debt. But you are on the other side of that spectrum, you are looking to help mortgage holders reduce their debt as quickly and efficiently as possible.

But before we get into how Sprive does that, let's talk about your background. What were you doing before Sprive? What did your career look like?

Jinesh Vohra 4:01

First of all, thank you, Brendan, for inviting me here today.

So my Yeah, my background is actually in investment banking. I worked at Goldman Sachs for about 14 years, and before then I was studying economics at the University of Warwick. Like many around me, I started about applying for internships, I landed the role, and then progressed through the ranks.

Probably three years in, I started to manage global teams supporting the security trading business, then I moved over to the risk divisions really focusing on strategies on how I could help the bank, essentially not lose money. And then in late 2019, I decided to leave and I started Sprive with two other guys.

Brendan Le Grange 4:31

Yeah, so looking at your CV, you see 14 years with Goldman Sachs. And to me when you see 14 years in one roll out of university, that's a career man, especially when you've got to the level you did. But then you left Goldman it was not for another big international bank, but to start Sprive.

So what was the inspiration to move to entrepreneurship?

Jinesh Vohra 4:52

When I was at university and thinking about what I wanted to do, I always liked the idea of starting my own business, but I just didn't know how, I didn't have the idea. And then, like I said before, everyone around me was going into the into the corporate world so I just followed in those footsteps.

And initially, I probably thought to myself, I'll do this for a few years, build some kind of skill set, start building a network, and I'll probably leave and do my own thing. And when you get into the corporate world, suddenly you're immersed into it, you start chasing promotions and chasing more responsibilities. And I was progressing pretty quickly. And I was enjoying the role, to be honest, I was working with really talented people. But I've always wanted to do this, there's always been an entrepreneur inside of inside of me - my dad was an entrepreneur, my grandfather was an entrepreneur.

So to give you some context, my grandfather grew up in a rural area in in India, zero education, then left India to go to Kenya and started being a labourer working in construction. But then, over time, he started his own construction business. And that changed our trajectory of our family. And my father was able to get a pretty good education in India, but then he moved to the UK, literally with £5 in his pocket, and not really knowing anyone, but then through grit and determination, he started up his own accountancy firm. And again, entrepreneurship did great things for my family.

And so I was doing really well at Goldman, I was earning good money, but I always felt like, "what can I do to take things to the next level?"

I've seen my grandfather do that, and my dad do that. I've got two young boys, I want to inspire them as well. And so you only live once. And so took the risk.

What was really also useful is that I paid off my mortgage. And so that gave me the freedom to be able to go to my wife and say, "look, I've got this crazy idea..."

I think if I still had the mortgage, my wife would probably have said, "Actually, no, you've got responsibilities, you got a family, you need to cover the household expenses".

Long story short, someone grabbed me and said, "do you want to do something entrepreneurial together"? And I said, "Yeah, sure. What's the idea"? We didn't really have an idea. So we started brainstorming. So every day we would sit and come up with ideas. I think we started in June 2019, and then in November 2019, we actually came up with the idea for Sprive. It really stemmed out of my own personal mortgage journey, I had pain points, I was trying to pay it off faster, I found that it wasn't as easy as it should be.

And then I also saw apps like MoneyBox, Plum, Chip - which some of your audience may may know - they help people set aside spare cash for the purposes of saving and investing. And I saw how quickly they were able to grow a user base. I think some of these, some of these fintechs, that I mentioned, are up to like a million customers now.

Could we do something similar, but helping people rather than save to invest? spare cash for the purposes of paying down mortgage debt? And that was the trigger. And and yeah, here we are now?

Brendan Le Grange 7:30

Yeah, it's a really noble goal, and we'll talk in depth about how are you doing that, because I think it's not just a good idea, you've got some really nice product tweaks in there to make it possible. But before we do that, just staying on the entrepreneurship journey for a moment, having seen these inspirational entrepreneurs in your family and had the goal in your mind, making that big leap - how have those three years been as an entrepreneur, what's it been actually building your own business?

Jinesh Vohra 7:55

I remember resigning and thinking, 'okay, what have I done'? And obviously at that time, you only have an idea - we literally had a PowerPoint - and now three years later we have a product, we have a team, we have customers, we love what we what we do, but that all takes time. And as a first time founder, there's no playbook, you're learning as you go.

There's been a definitely a roller coaster, but the business is doing well. I'm really pleased with with the traction. So I definitely have no no regrets.

If I was to compare corporate life to, you know, life as an entrepreneur, I think they're very different. First of all, in the corporate life, I was getting paid! And there was a period of time, for quite some time, where as a founder, you're not paying yourself because you have to focus on investing into the business.That was obviously difficult in itself.

Then I was at Goldman's for so long, I focused so much energy and building a network there, where people knew what they were able to do and you had people, you know, if you need to speak to a lawyer, you have a legal team, you need to speak to the finance, we have a whole finance team, right. You have anyone that you need to be able to run your business, just a phone call away, there's a whole directory and you can just tap into that. And they're the best at what they do.

As an entrepreneur, you don't have that BlackBook. And so you've got to build that from scratch. And you don't have this huge budget or where you can just find people and pay like ridiculous amounts of money for their expertise. And so you've got to be really scrappy. And then at the same time you got to develop yourself when you're doing something especially in the corporate and you tend to specialise generally over time into you become like a subject matter expert, and then you're very confident you do that very well. As an entrepreneur, you become a generalist, you end up having to learn lots of things.

So you end up learning about finances and modelling and making sure your business model and you've got that in a good place. You're running your business properly, then you've got marketing. I've never done anything in relation to marketing. And how do you acquire customers? How do you retain customers? What are the key KPIs that you should be really looking at fundraising?

You know, people automatically assume that because I was at Goldman Sachs on every investor under the sun and my role was to deal with I wasn't in corporate finance. I wasn't talking to the investing community. So I had to build out from scratch. And so I think it's been a tough grind. And as a first time entrepreneur, I think if I had to do it again, I would have done things a lot more quickly, but that's the way the cookie crumbles. And yeah, definitely, really enjoying it.

Brendan Le Grange 10:12

In the early days, that's where I guess the freedom from being mortgage free comes in, in that it's not necessarily so much that you're outlaying cash, but so much time before you're getting an income coming in that you've got to find these different people and bring together the team, lots of waiting around and looking for people, which is much easier if you don't have a few thousand pounds every month going out the bank account and adding that stress.

So let's talk about Sprive and how you're helping other people to do that for whatever their financial goals are.

You're a fintech in the mortgage space. And generally speaking, in the popular press, when we're talking mortgages, we're either talking about access to mortgages - so often about first time homebuyers, how do we make that easier - or we're talking about the cost of mortgages - interest rates are rising now, what does that mean for people. But with Sprive, you've taken a bit of a more creative look at the market and how you solve the problems of homeowners.

So, tell me, maybe first what is the state of the mortgage industry as you see it today in the UK, and then where does Sprive fit into that ecosystem?

Jinesh Vohra 11:16

If you take a step back, there's about 11 million mortgages, residential mortgages, in the UK. And what you tend to find is more and more people spend on average 25 to 40 years to pay that mortgage off.

And when you look at some of the statistics, what you tend to find is that more and more people are getting onto the property ladder later in life. You know, property prices are rising. I think I saw an article this morning on the BBC saying they've still risen 10%. And obviously, salaries aren't rising, anywhere near that you're taking into account inflation, people's people's salaries and relatively speaking are probably decreasing. And so people are having to borrow more, for longer.

There was a stat that we found from Moneyfacts that said that 59% of mortgages now being sold by lenders in the UK are 40 years. And so you can imagine getting into a situation where you can save or deposit, you buy your first homr because you know, UK has that culture where you don't really want to be paying someone else's mortgage by renting. Because ultimately, you're never going to then be able to like grow wealth as easily as having your own home. But by the time you can do that, you're probably in your early 30s, mid 30s, even into late 40s. And so it's unsurprising when you see that some statistics that show that it's expected that more than 3 million people will have a mortgage past the age of retirement.

And I think that's just crazy. Imagine in your 70s, they were having to worry about a mortgage, what we tend to find just generally like talking to people, but also looking at typical behaviour, especially in the past is typically you take a mortgage, you pay your fixed monthly payments, and then maybe later in life, when you're getting into your 50s, maybe 60s, you start thinking well, I've got this mortgage probably should pay it off. So you throw like lump sums of cash towards paying it down.

But a lot of people don't realise that like for example, there's a concept called amortisation, which means that in the beginning of your mortgage, you're paying much more interest compared to later years. And so it might make sense to actually regularly chip away because at the beginning, you're paying a lot more interest.

And it's interesting, I talk to our customers, and I was actually at an event yesterday and I was talking to someone who just bought a home and they were so focused on buying the home that the mortgage was almost like this afterthought, you get this mortgage, and you don't really think about the implications of the total cost that you're going to be paying over the lifetime of their mortgage. And I asked them a really straightforward question: I said, look, you're making these monthly payments? How much of it do you think is interest versus paying back the actual capital? And she had no idea she was she was like, well, interest rates are relatively low. I know they're rising, but I imagine it's like 10%. And it's more like 50-60% on at the beginning is essentially going towards interest.

And so I think there's an element of this whole educational base in terms of understanding that if you take a mortgage, what does that mean? What's the total cost that you're going to pay?

I remember me getting my mortgage offer document and it's saying, for every pound that I borrow, I'll be paying 50p in interest. Okay, that seems like a lot. And we know through research and trying to look on different articles, the money saving expert, and other forums, right? Okay, so we can actually pay off this mortgage faster, there's a concept of overpayments.

And so, thinking this is the right thing to do, we started making these ad hoc overpayments and we probably started making overpayments maybe once a year, twice a year. I could get a bonus and put some cash towards the mortgage and over time we saw our monthly payments started to reduce and I thought this is quite nice, my monthly payments are reducing that means I need to pay less towards my mortgage each month and then I happened to look into it in more detail and I didn't think personally that the lender that was weird that the information was that clear. And I realised that for me to actually save the interest that I was expecting to save and actually had the benefit of becoming mortgage free faster. My monthly payments needed to stay the same and that actually I had to call my lender and update my what my mortgage preferences to let them know that you know that was the situation.

I remember going into the website at the lender and trying to play around with like overpayments capital It's showing that as I make these overpayments that, you know, I'd say this much interest and my time would reduce. But I was very, very surprised to find that actually, I'd have to call my lender to make that happen. And many people say this, now that we've started to bribe, don't realise that you can actually pay off your mortgage faster, and that you can make overpayments.

Brendan Le Grange 15:17

I think with the mortgage, there's so much that happens up front, it's about the house, you're trying to buy a house, you're very stressed, you want this house to go through, they probably tell you somewhere in the fine print of the 40 page document they hand over to you that you just want to sign so you can buy the house, there's something in there. But that's not really a time for clear thinking. It's a time when you just want to get out the way and start your life there. And, yeah, preparing for this I went and I Googled 'mortgage repayment calculator' and the ones that popped up, none of them have the ability to change the term or to change the overpayment and see what the impact is on term.

They say how much you're borrowing, for how long, and at what interest rate, he has your monthly fee. And then maybe it says like a £1,500, you can't then tell it what if it was £2,000. It's not something that's there unless you specifically Google something like "mortgage calculator with term or with early paydown" and then you'll find TheMoneySavingExpert or maybe some others that will help you do it.

But yeah, the industry is not set up to make that easy. And one of the things I like about Sprive, without getting too far ahead of ourselves, is that you acknowledge that mortgages exist more than just the day you sign them, you know, there's the day you sign the papers in the bank, and then 25 more years or 40 more years these days. So day one, they give you all the paper, you're speaking to the mortgage advisor, but then you've got 40 more years on your own. And I think it's great to hear about ways to manage it going from there.

And as you said, you've seen firsthand that benefit. I mean, I've seen scribe you already get good news coverage, I think it's obviously it's a message that resonates with any homeowner, but Forbes wrote an article and you and we were chatting earlier, saving around £10,000 for your average customer. I mean, it's it's putting away a little bit of money each month, but £10,000 is a really good deal.

So how are you doing that? How do you go from this idea of okay, we can help people become aware of early repayments or overpayments? How do you turn that into £10,000s of saving?

Jinesh Vohra 17:08

Yeah, so maybe it makes sense to explain how the how the product works to give that context where you mentioned, like the overpayment calculators and things like that, if you decide that, you know, that's something that as a homeowner you're really interested in doing, you suddenly see the cost of the debt, if you're aware of it, and you realise that actually, I don't really want to be paying my lender that much interest over time, especially with interest rates rising, that number is just gonna get bigger and bigger.

And it's like, I remember like for my personal mortgage, and maybe even bring it closer to home, I was expected to pay if I just carried on paying my monthly payments, about over £150,000 in interest, which is a lot of money. And so and so when I was making over payments, I think I ended up saving about £70,000 in interest, and my property doubled. And so the numbers can be really, really powerful.

And so the way the app works is essentially it takes a few minutes to sign up, you link your bank account using open banking, we then ask you for your name, address, date of birth, that allows us to pull information about your mortgage, which is obviously key for us, because we're obviously helping people pay down their mortgage. We then ask the user to set a monthly minimum and a monthly maximum to overpay - for example, you might be able to afford no questions asked £25 extra towards your mortgage on a minimum basis, but on the maximum, maybe £75. And so if you have a really good month, where you're spending very little, you're saving a lot more than would probably over the month, help you set aside much more, close to the £75 versus you know, weeks and months where you're spending a lot of money and whatever you might spend your money on holidays or presents or going down the pub as an example.

And then with one tap, you can make overpayments to your mortgage. So when you sign up, because if you get a Sprive account in your name, and so you're making a third party transfer to your lender, just with one tap and as you start making over payments, because we set aside money probably maximum three times a month within that range, we never breach those those ranges that you set.

And obviously you will have some customers who have a lot more discretionary income, who are a lot more wants to kind of get be more aggressive on trying to pay this mortgage down. And they might go towards a much bigger amount towards that £1,000s each month trying to just get rid of this thing. And so then you start to see like very visually, what's the impact of these regular overpayments you're making, whether it's weekly or monthly.

If I keep doing this, I'm on track to pay off my mortgage, like you said, save £10,000 in interest, pay it off four years earlier, you can start seeing things like how much of my home do I own. So we've got a visual every month. We've got lender grade home valuation software that updates the value of your home, we track automatically your mortgage and what's your outstanding balance. So you might be like, Well, I actually own like 86% on my home and that's quite quite motivating. But over time, hopefully you'll get to 100%.

You can see things like a loan to value which is kind of interesting. I remember when I had my mortgage, I had no idea what loan to value I was on and I remember being in a place where actually I was really close to getting to the next loan to value threshold because the way in the UK works every 5% loan to value intervals, you can then get access to cheaper deals and therefore have a lower interest rate. And so we did that visibility today. If you're quite close and you're close to them, you're remortgaging you might want to overpay a little bit more, and that increases your chances of being able to kind of unlock cheaper deals.

Another good example, you talked about spreadsheets and I had a spreadsheet when I was personally overpaying before we built strive is early repayment charges. If you are in a position where you can overpay more than the typical 10% of outstanding limit that you have when you're looking to like pay off your mortgage faster. You got to track these things. So we help people in the app, track it so that if you're getting close to that limit, we'll let you know, you can see how much of your allowance you've used.

And then we've added a feature because on a given day, there's like 20,000 mortgage deals across 90 lenders. I remember when I was looking to refinance, I was like, should I switch, should I look for a new mortgage, and there's so much choice out there, it's really difficult to know how to go about finding the best deal that would strive when you sign up, you link your bank account, we get an idea of your spending behaviour, we get an idea of what mortgage you're on your your credit kind of situation, etc, etc, your property, how much it's worth, these are all different variables that essentially a lender uses to underwrite a mortgage. And so that allows our technology to be really forward thinking in terms of like, what is the best mortgage for you, and we can challenge your mortgage every single day against the market, I think is really powerful.

There's some great brokers out there, but would they sit down everyday for you and actually compare the deals in the market towards your mortgage? Probably not. And with interest rates rising as a lot of opportunity for you potentially to even break out of your deal. If you want to lock in rates, if you feel like you know that the rates are going to rise so much that it's beneficial.

And I saw a couple of articles in the newspapers, very thematically, a lot of people are actually looking to like break their mortgages early. And so we can help people with that.

And then we have we combine smart tech with actual expert advisors, because the way the regulation works here is that there's no such thing as robo advice - to make sure that any product that ultimately someone gets, it needs to be fit and proper based on their personal circumstances. And so we have access to experts that can essentially validate, make sure the product that's been shown in the app is the right one and that there isn't maybe a better one out there, well, then they'll make that adjustment and then help that person get the deal.

And yeah, you can then track progress by the app. So you can kind of see where you are in the journey. And so we've spoken to a lot of customers around like what kind of mortgage deals would you be interested in, I was obviously the there's the classic, fixed and variable. And there's the classic like just like get a two year, three year five year and we show that but we've actually done something which is quite unique, we break out the mortgages into four different components. So what is the cheapest in the market, so you pay the least amount of interest over the lifetime of the mortgage, then we've got one that shows like the one that gives you the lowest monthly payments, because we're living in this cost of living crisis, a lot of people are like, do I have enough money coming in and covering my costs each month. And so even though it might be a little bit more expensive in the grand scheme of things, if it means lower monthly payments, they might want to go for that. And then you've got the cheapest product within your existing lender switching, it can be a pain, right? And switching lenders compared to staying with your existing lender is so much easier thing with the existing lender. And that's why I'm sure lenders make it easier so that you're a little bit reluctant to move to move to another another provider. But sometimes you do the math. And because people are borrowing so much for so long, that small interest rate change, you might not feel like much, but actually it's gonna cost you like 1000s and 1000s of pounds. And so we're trying to like help people make that decision. Going well, if you switch within your existing lender, you might get this. But compare that to like deals the cheapest on the market, maybe it makes sense for you to switch to another provider.

And then lastly, we're showing deals that allow you unlimited overpayments. And it's actually a product that I used personally to help me pay down my mortgage faster. So the 10% is restrictive, then you can you can get a product that allows you flexible overpayments.

Brendan Le Grange 23:50

I think a lot of people do think of their mortgage as fairly static. And yes, we know you can refinance. And people of the two year, the five year cycle, they're going to refinance the mortgage. People are more familiar with that now. But as you're saying things like loan to value - your property's going up in value, your mortgage is coming down as you've been repaying it faster. If you're paying over the minimum, these will change potentially the interest rates you qualify for, it may be a few years down the line without even doing the moving about you now you're less risky, you've got a better loan to value these things are happening every day. You've got all these competitors. And I think people don't necessarily realise how flexible a mortgage can be underneath.

And it can be - well there are a cost as you say, but to have someone who can give you the guidance on that is fantastic - but I think also to break down that barrier. It's something I talked more about in the collection space where I would wish more borrowers could understand how clinical the banks look at it, you know, it's not personal. They see you as one of 100,000 entries in the database. I think people take too much stress and it's to the banks benefit because it will feel a sec almost personal insult to your bank maybe to move and you know, naturally we maybe want to resist moving around and jumping about too much but actually that's what the systems therefore that's what you our unique situation today is if you've got a better situation, because your home is more valuable, you pay down your mortgage, these deals are there. And if we've got ways to switch it, and we take out that human awkwardness of earning up a banker having to talk them down, because they're going to try and renegotiate, it's fantastic to empower homeowners with this, do think about something that's actively working behind that.

And yeah, month to month, where I've just come back from a holiday to have something that could be reacting to that, oh, you're going out to dinner all the time, you're going to the resorts all the time, you're spending much more this month, I'm not going to take that money out your bank account, and then this month, okay, you're sitting at home, maybe it's January, you you're trying to recover from December, you're not going out, you're not spending any money. And reacting to that is fantastic to hear. Because, yeah, I think that borrowers can be empowered by these systems and really work their money to their best to get into a position where you own a house.

And it is the route to wealth for the vast majority of people that sort of middle class dream of buying a house with a mortgage at a low rate, paying it off over your career, and then retiring with his asset that you can then hand over to your kids. So let's maybe talk about some of that innovation that you're doing and the product features you're looking at how do you find ideas? How do you hear that voice of the consumer? And then how you turning that into product features so quickly?

Jinesh Vohra 26:14

Yeah, I mean, I think it's as a startup as a FinTech to be agile, lean, and move quickly. I think the beauty of starting from scratch is your concrete design, you have a vision in mind. And so that does allow you to like build, build more quickly. And as a smaller team. So decisions are getting made a lot more quickly. I'm a firm believer of trying to be consumer-led. And so listening to our customers and seeing what their pain points are.

And so obviously, we got this two features that I mentioned that live in the in the app, and it's like you touched upon is giving the users a lot of control, law, transparency, and helping them ultimately save money on their mortgage and pay it off faster, which is key. Now you've got this looming cost of living crisis, right. And so there'll be some people who will have good jobs who won't be as impacted because they've got good, good discretionary income, and so they can afford to like pay off their mortgage faster.

But I'm a firm believer of being mortgage free should be achievable for everyone.

It shouldn't just be for a wealthy because just the concept if you go to like www.sprive.com, just three pounds a day, five pounds a day, you'd be amazed that if you just regularly chipping away the impact that it can have.

The next feature that we're launching next month is this concept of Shop with Sprive, so everyone has to go to their weekly grocery, whether it's Morrison's or M&S or ASDA and so every time you shop with Sprive, using this Sprive app, you went to Morrison's you spent a £87 on your weekly shop, you then pay that via the Sprive app, you get a code that comes up, which you're going to use at checkout to pay for the basket and immediately get extra cash that goes towards helping you pay off your mortgage faster. It's almost like cashback on steroids.

And it's not like some of these plastic kind of vendors where you're waiting kind of weeks or months to kind of see the money, and then you get like a few pounds here and there, it's real time money straight to your Sprive account. And essentially, then one tap, you're investing that towards helping you pay off your mortgage faster. And if on average, a customer just to their everyday spending can get an extra £25 go towards their mortgage, you'd be amazed at how much interest they can save, and how many years they can knock off their mortgage.

And with interest rates rising, those numbers will just get bigger and bigger and bigger. And so I feel like it's a lot more exciting for people as well. By doing that weekly shop, they can have that impact.

We then started talking to customers about other things, and we start to realise is that there's this scale, this wealth divide that's happening here in the UK, where you've got the older generation, like my parents and their generation where they benefited from, you know, rising property prices and a relatively good ratio between salaries and how much it would cost to buy a home. So you got a lot of people who are selling on a decent amount of wealth. And unfortunately, you've got a generation coming in that are having a lot of challenges and other people that are in that kind of fortunate position, they are going to be subject to inheritance tax.

And so is there a way that we can help those individuals pass on wealth when their children need it the most in a very tax efficient way, but also help their children pay off their mortgage faster. And so that's something I'm kind of looking at, we're at the design phase talking to experts that know this space quite well, but I am targeting to hopefully get this in the app by around November. That will that be really nice because then again, if you're a homeowner with a mortgage, your parents can even just give you £25 pounds a month towards the mortgage, that gain would make a huge difference.

A parent could gift you, could say, well, I could give my child £20-£50, that's fine, but they could spend that on anything. This is like making sure it's going to helping them kind of changed their life. And we haven't really touched upon this.

But this whole concept of being mortgage free, it really changes your life. Like I've personally paid off my mortgage and it's opened up massive, massive opportunities. I've always wanted to start my own business and I can because I paid off my mortgage. Now some people might - if you ask them, what would you do if you didn't have a mortgage? - they might say, well, I might go part time, I might change careers, I might go travelling, I might spend more time with my family, I might retire early, the opportunities are limitless but a lot of people are tied because they have a mortgage to pay. They'll do what they need to do to be able to have a roof over their head and that can be kind of massively massively stifling.

Brendan Le Grange 30:05

If you save a lot of our parents generation, they'd benefit from rising home prices, which makes them sort of capital rich. But that doesn't actually mean they've got cash flow of the wealthy, because it's all in that one house that they still live in. And some parents will downsize and free up some capital, but it's awkward, it's not very liquid. So you might have parents who are comfortable, but don't have, you know, the £100,000 to give a child to help buy their first home, but £25 a month, it's actually something that can make a difference, essentially, it's earning the interest rate plus the tax rate.

So it's a really high return investment that you can help your kids with, I think that's a great route.

But I think overall as well, this sort of idea that getting mortgage free, you've got this asset, you've got this home. Now, let's say okay, now there's no monthly expenses, you've got this base, they've got the choices that they can then start to do something glamorous, like start their own business or start investing I mean, you've you've paid down your mortgage, now, maybe you can buy a small house to retire into a holiday home to let out as an AirBnB for a few years.

Jinesh Vohra 31:08

Yeah, and it's a really good point, like all about opportunity costs with the cash that you have, right. And so I remember when I was, you know, working long hours, 60-70 hours in the in the city, you think I'm in finance, I'd be really good at mine personal cash, but I would have money lying around in my bank account, earning hardly any interest, and you get taxed on it. And obviously, when you're paying down your mortgage, it's guaranteed it's tax free. And now you're seeing like, at the time, I was doing a bit of investments, and I was putting a bit towards my mortgage.

And a lot of people argue that with investments, you can make a higher return. But obviously, interest rates are rising quite rapidly, people are paying three, three and a half percent now on their mortgage on a switch. If you look at some of what the economists are saying they didn't that maybe interest will go up to even 7%, etc, etc. There were there was a time in the UK wage rates were at those levels, if not higher.

And if you're looking at a higher rate taxpayer, for example, paying 40% tax, even 3% is essentially a 5% return because you're not paying tax. And suddenly that becomes quite attractive and markets the way they are, there's a lot of volatility a lot of people have invested who are not doing as well, there's the financial freedom and the bit that you said, but also doing something smart with your money. And with interest rising. Some people had previously may have thought and actually with interest being low, I'm not going to think about overpaying and I'm going to try to invest.

But now as rates rise, the equation changes.

Brendan Le Grange 32:26

It's again, sort of using tech to make these tools available to everyone where you would think that maybe in the old days, the 'oh it's got a tax benefit' and it's got an 'interest rate benefit' and you start thinking, okay, I'm going to need a financial advisor so that, it's going to cost me more to get the advice. And to put it in, it's too complicated. I think that pulling it under one roof, it's made it accessible.

But also, I think a great way to see oh, £50 a month isn't just £50 a month, it's the compounded impact because that's what it is that compounded over 20 years or whatever you use, making the savings from the you know, the saving today is essentially compounded at three or 4% for the next 20 years until that mortgage is paid down. And suddenly £50 a month over a couple of years becomes £10,000 of saved interest.

And that's when it really comes into its own.

And we are I think seeing on the internet, a growing group of people that are much more aware of their finances, we've got all the apps on personal finance to help you choose the best deal, to help you choose the best loans that are out there, to help you budget and check your credit scores - the money saving expert sort of things, Nerdwallet, and those guys like really getting into details of how much we spend. There's much more I think appetite for this. Okay, how much my house might now buy? What have I done this month in making these small changes? Yeah, when all other costs are going up, the sort of ability to pay maximise the money you do have, and the wealth we can create is more important than ever.

Jinesh Vohra 33:51

Yeah. And the last thing I'd probably say on this is that, no, we're not a comparison site, we're not a broker, we're not a lender - we're a tech company focused on helping homeowners save as much money as possible on their mortgage.

And so very much consumer focused, like trying to look out for the consumer and help them and give them the tools and like you say, you know, a lot of people don't want to pay for a financial advisor, and why should they this information should be at their fingertips and so, early on, I don't think we're going to continue to add more features I didn't mention, but I love this idea. And obviously this isn't something we're gonna do this yeah, but maybe even next year where people get credit score boosts because they're paying down their mortgage, they're doing a good thing and so that that makes them more attractive to lenders so that maybe they can get cheaper deals, etc.

Maybe there's there's people listening to this podcast, they're thinking actually, there might be something really innovative we can do and work with strive to be able to improve the customer experience, if you think about it, that actually meeting them monthly payments. So from a credit risk standpoint, they actually even though they're overpaying. So actually, the risk of default is super low. They got high affordability and so there's a customer that technically should be quite easy to actually get approvals done. Why shouldn't they be able to in a few clicks with them?

Imagine that we have access to things like open banking, to be able to get mortgages within weeks or days or minutes like you can with some other financial product. So yeah, if there's anyone else listening is interested in the conversation, I'm more than happy to help.

Brendan Le Grange 35:11

There's somebody out there who does have the lowest cost mortgage over the lifetime of a mortgage. And they're really struggling to get this up, because somebody else says mine's less per month and to make it transparent to help consumers understand your offering is good for everyone in the industry, of course, the is a sort of a bad money you can earn when consumers are confused and are maybe not taking the best deal.

But I'm going to assume the best about our lenders and that nobody wants to make their money that way. And actually lenders benefit. When consumers understand what niche are you selling to me? It's not something a bank is famously good at, these customer experiences, so I think the banks can benefit too by the existence of Sprive and having people understand, okay, now I can see what this mortgage is, I know what type of mortgage I want, not just variable versus fixed, and one's higher than the other that okay for my financial goals, this one is because I'm going to be paying mine off quicker, or for my eventual goals. This is better, because this is what I'm doing.

So I'm all for that.

And I think it opens up for everybody to compete more effectively. Instead of having some celebrity endorsement, let's have products people can understand by the best one, because in competition works. So transparency, I think is a great thing to be bringing if people are listening, and they think well, one, maybe they can work with you as five to build better customer experiences for themselves or partner with their products. Or if they're listening, and they've got a mortgage that they would like to pay down and understand better and understand how much of their homes they own and how they can increase that way can they go to get the app or to go to learn more about what you're doing and maybe contact you?

Jinesh Vohra 36:45

Anyone listening and they have a mortgage and they're curious, are they are they interested in getting our help in terms of paying off their mortgage faster, just head to the App Store (both on Android and iOS). I think on iOS we've got a 4.7 App Store rating. So yeah, just download the Sprive app.

And then we support 12 lenders at the moment. So probably cover about 80% of the market. So if we can support your lender, then obviously you can sign up takes a few minutes, if not put yourself down on the waitlist and then over time we'll be supporting more than this will let you know when we can support you.

I post quite regularly on LinkedIn. So if you are keen to just kind of get in touch and whether it's just passive and just kind of follow our journey then just send me a LinkedIn request. I'm I'm happy to accept them always keen to kind of build my network. Likewise, if you want to get in touch and have an have a chat, then just send me a DM and I'm sure we can we can start corresponding there.

If you're looking for more information on Sprive, we have our websites sprive.com. So yeah, we have a lot of information in terms of how the product works. We have FAQ, we have blog articles, trying to help consumers just understand a little bit more about what we're doing our journey but also just general mortgage tips and education trying to like increase confidence on how people can kind of manage their mortgage.

Brendan Le Grange 37:53

Great, well, thank you. I'll put those links in the show notes as well.

Jinesh, thank you so much for your time today. It's been great chatting, said I'm looking for a house at the moment hopefully have a half deal done but it's always a little bit up in the air in the UK. But as soon as that's done and we can mortgage it. I'm going to be on the App Store myself and I'm going to be watching your growth over the next few months. I think it's a great product.

Jinesh Vohra 38:15

Yeah. Thanks for having me.

Brendan Le Grange 38:16

And thank you all for listening. If you enjoyed that, please do rate and review on your preferred podcast platform and share widely including on LinkedIn. And while you're there send me a connection request. The show is written and recorded by myself Brendan le Grange in Brighton, England and edited with assistance by Kane Hunter. Show music is by Iam_Wake and you can find full written transcripts, show notes and more content at www.HowtoLendMoneytoStrangers.show

And I'll see you again next Thursday.