Meaningful Money | Jinesh Vohra - Part 2
Our founder and CEO, Jinesh Vohra, had the opportunity to speak to Pete Matthew on his podcast at Meaningful Money. He talks about what inspired him to start Sprive, why so many people in the UK are making overpayments, and his future ambitions to help more people become debt-free.
If you have 30 minutes, you can listen to the full podcast here, or alternatively here is an edited version of the interview available for you to read. Here is part 2 of the interview.
Some people say it makes more sense to invest. What’s your view?
I’d start by highlighting there are a lot of people making overpayments. Research shows that nearly half of homeowners are making overpayments at some point in their life. The motivation is less driven by financial rewards but more around the urge to have freedom over your life.
For the average homeowner, their mortgage is their largest household commitment. If you can’t afford your monthly payments, you don’t have a roof over your head. I often ask homeowners what they would change about their life if they didn’t have a mortgage. You can suddenly see people's eyes light up because suddenly they see so much potential in how they may choose to live their life. Some want to change jobs to something they would love to do but don't pay as well. Others may choose to go part-time and spend time doing more of the things they love. Others may travel more or even start a business.
My personal view is that you only live once, so you got to take advantage of that. Do you really want to spend the next 40 years as an example earning enough to pay the mortgage but ultimately making sacrifices to how you live your life? Paying off my mortgage was the best decision I ever made. Whilst I appreciate not everyone can do what I did so early in their life, it did give me the freedom to quit my corporate job and start Sprive. Paying off my mortgage was a fantastic feeling and just remember the weight of my shoulders just dropping. We also saved £70,000 in interest, which is a lot of money.
With investing, you need to know what you’re doing. Whilst overpayments are much simpler to understand and you’re earning guaranteed tax-free returns. It pains me, as I come from financial services, however, I often had money lying in my current account earning hardly any interest and getting taxed. At Sprive, we make it super easy and you’ll be amazed at how much you can save just by putting an extra £3 a day towards your mortgage. Whilst with investments, you might invest in pockets, debt is ruthless with interest calculated daily. Lenders also front-load interest payments so at the beginning of your mortgage 50 to 60 percent of your monthly payments are just interest. So you're much better off chipping away early away in your mortgage than actually making lump-sum payments when you're towards the end when the lenders have already earned most of the interest in paying back the capital that you initially borrowed.
When I talk to millennials, they can't think of anything worse than spending the rest of their life paying off their mortgage. They want to retire between 40 and 50. At Sprive, we're seeing a lot of younger people who simply want more control over their lives. In addition, the home is an asset and generally speaking property prices are increasing in value and so your money isn’t just going into the dust. There's value there too.
You quit your corporate job and built Sprive. So how does it work?
It’s super simple to get started and takes 3 minutes to onboard. You essentially link your bank account via open banking so we can help you set aside money without impacting your lifestyle. With one tap, you can essentially make overpayments to your lender. We currently support 11 of the largest lenders in the UK. We can now support 8 million homeowners and over the last four months, we have got over 2,000 customers without any real marketing. The app can show you how much interest you’re on track to save, how many years you’re on track to save and you can see how much of your home you own.
I recall when I was paying off my mortgage, I was using spreadsheets to manage the process, which was painful. I also didn’t appreciate how my loan-to-value impacts my ability to secure a mortgage at better rates.
Where next from here? What are your future plans?
Right now we’re building a feature that helps you scan the market 24/7 for better deals. On a given day there are 20,000+ products and it’s a pain to find the best product you’re eligible for. You have 4,000 mortgage intermediaries to choose from, there are comparison sites, and you can even go direct to lenders. Many people go to comparison sites, which show you a lot of deals, but they don’t check if you can secure those deals and you’re required to fill in a lot of the paperwork yourself. With brokers, how do you know what is a good advisor? Most customers judge them on their rapport and ability to secure the mortgage quickly. I don’t think that’s necessarily the right way to judge if a broker is any good and we want to improve the transparency so homeowners can make better decisions.
With Sprive, we understand your finances and your mortgages. This allows us to scan the market and challenge your product against every deal in the market. If we can find a better deal, we’ll let you know and then work with our team of experts to help you get that mortgage. We’ll show you the cheapest product in the market, the product with the lowest monthly payments, the cheapest product within your existing lender, and the best deal that allows you to make an unlimited amount of overpayments.
Beyond that, we have a lot else planned. You will have to just watch this space.
