Most people have come to realise that the word ‘mortgage’ literally means ‘death grip’. What a lot of folk do not know is that a home mortgage scheme, instigated and introduced back in 1989 has set over 270 NZ home owners free from this financial strangle hold.
Over three decades ago two of our local churches namely Whakatane Christian Fellowship (Liberty Centre) and the Whakatane Baptist Church saw the potential to help people toward home ownership without the burden of having to find crippling mortgage interest payments throughout their adult lives.
Most of us spend our working lives, and beyond, paying off a bank mortgage and when we finally get free we watch our children commence the same cycle.
These church groups asked, ‘What if there was a way to circumnavigate this financial treadmill. What if there was a way to release borrowers from having to pay interest when you lend them money?’
They did the sums and through prayer, perseverance and determination found the formula for success. Since then a growing number of potential home owners have discovered that such a system (named Liberty Trust) is open to every New Zealander no matter their belief, creed or race?
No, it is not a scam or some magical formula. It certainly contradicts the norm and when you grasp the potential and ongoing benefits for generations of families you have to admit the whole idea is simply brilliant.
Back in those early days a survey was conducted among church members. Through this, it was discovered that the average mortgage amounted to $35,000 and together the surveyed group owed $2million. Collectively they would be paying a further $7million in mortgage interest over the remaining life of their mortgage (yes, interest payments were exorbitant back then). The challenge was to implement a fool-proof system which had the ability to turn such massive interest payments into a benefit for borrowers and their families.
In a nut shell this is how Liberty Trust worked; each family (or individual) contributed at least $20 per week into the trust fund. As soon as there was enough money in the kitty the first family (by ballot) would re-finance with an interest free mortgage. That family would then re-pay their mortgage (interest free) to the fund until their loan was re-paid. They were still paying the same monthly payments as they would have on their previous bank loan, but now both the interest and principal were paying off the loan. This meant the borrower was able to repay their mortgage many years earlier and thus save a fortune.
At the start of the scheme The Liberty Trust attracted 100 applicants and was administered by 5 volunteer Trustees. The figures showed that the last contributor would receive their interest free loan after twelve years. Sceptics said such a system would not work, they were wrong, it worked back in the eighties and with care and fine-tuning is still relevant and very much alive today. Along the way changes have been necessary; the ballot system for acceptance of loans has been circumvented and is now replaced by a fairer ‘first come, first served’ basis. Participants are now able to choose how much they will donate.