A few people have asked me how I became mortgage free in such a short period of time. So I thought I’d share my story below, as well highlighting how I boosted my overpayments through cutting expenses and increasing my income.
For me, 12 years was much longer than planned but life threw a few financial curve balls my way.
The beginning
I bought my house with my partner in 2006. We were first time buyers and put down a 5% deposit on a house that was at the lower end of what we could have borrowed.
We’d always planned to pay our mortgage off early, a desire that was fuelled further by watching the BBC series Pay Off Your Mortgage in Two Years in early 2006.
We were on a fixed term mortgage of around 5.6% and I couldn’t believe how much of our monthly payments were going towards the interest. It was then that I truly realised what a money pit our mortgage was.
After the first few months of settling in we’d bought all of the essentials that we needed and we were able to start making overpayments. We calculated what we could afford to overpay and started adding that to our mortgage payments, which started to bring down the principal.
Our plan was always to pay off the mortgage as soon as possible, rent out the house and buy a second home, so we never really got too caught up in making it a home. It was basic and functional and served our needs.
The turning point
Then in 2010 the relationship fell apart. Although it turned out to be the best thing that ever happened to me, at the time it was a very dark period.
I was dealing with heartbreak, didn’t know if I could afford to keep the house or pay my partner out, and on top of that my workplace was undergoing a huge restructure. It felt like everything in my life was changing.
To make things worse, we were also in the middle of renovating the bathroom and hallway, so my home was literally a mess.
My partner didn’t want the house and as I lived close to my family, it made sense to stay near my support network. So I made an appointment with the bank to discuss my mortgage options.
As I walked into the office, I was incredibly scared, wondering what i’d do if they refused. The appointment seemed to go on forever but thankfully they agreed to transfer the mortgage into my name.
It’s funny how we sometimes have to risk losing something before we realise its value and from that moment the house started to feel like a home.
Building a budget
Although the bank had said ‘yes’, I was still worried about managing my finances alone. I’d always been careful with my money but now I had a huge debt that was solely my responsibility. It was time to put on my big girl pants and tackle it.
I began to budget with military precision. I closely tracked my spending and created a strict budget for my groceries, utilities, home/car maintenance and a small amount of spending money. Anything that was left over was transferred into a savings account for emergencies.
I learned how to cook and create meals from scratch and started to bake my own bread. Basically, doing anything I could to stretch my money further.
The Money Saving Expert forums became my second home where I found budget recipes and plenty of advice and support.
Finding as many ways as I could to make my money work harder for me was a key ingredient in becaming mortgage free and I still do it now. I’d recommend that anyone with any type of financial goals begins with a budget.
Making more money
Alongside budgeting, I also found ways to make more money. I sold any unwanted items, did online surveys and also did some after-school tuition.
Any extra cash I made (or saved by using vouchers) went straight into the overpayment pot and was transferred towards the mortgage.
I also set up a spreadsheet which showed the effect of my overpayments on my mortgage total and the amount of interest I’d saved. It was really addictive and it spurred me on.
Enjoying the journey
Whenever we plan anything, it’s so easy to get caught up in the destination and ignore the journey. And while paying off the mortgage was an ongoing focus, I still enjoyed myself along the way.
Some of the highlights have included becoming a chicken keeper, building a vegtable patch, buying my dream car, visiting Sorrento and getting myself into the best physical (and mental) shape ever.
I’ve grown so much over the past 12 years that I hardly recognise the person who I used to be. My confidence has increased and I’ve become aware of what I can achieve with a bit of focus and intention.
That’s not to say that everything has been rosy along the way. I remember waking up to a dripping sound and found water coming through the loft at 2am. It then got worse when I discovered the loft was full of snow. To cut a long story short I needed a very expensive roof replacement – and yes, I cried.
A new (to me) car had the engine burn out on a motorway. It was my first time driving on a motorway too! I thought I was losing power and the thick black smoke confirmed it. Needless to say, the car went straight to the scrapyard.
I’ve discovered that the house had no earth and needed rewiring and also that someone had decided it was a good idea to smash up and bury a greenhouse in the garden. I’m still finding remnants of it to this day.
So this little home of mine has needed a fair amount of TLC over the years. But that’s exactly the point, it’s no longer a house, it’s a home and over time it’s become my sacred space that I return to at the end of the day.
Over to you…
So now you know how I became mortgage free in 12 years, it’s your turn. If you dream of mortgage freedom or financial freedom in any form, you certainly can do it.
If one girl with a brood of chickens and a sleepy cat can do it, then so can you! We’ll be cheering you on from the sidelines.
And if you’re still not sure how or where to start then check out my post on how to pay your mortgage off early.
Image courtesy of Sandy Millar on Unsplash