Many people dream of paying off their mortgage early but don’t know where to start. Some assume that they need to be rich, while others think that they can’t afford to make overpayments. What people don’t realise is that it’s the small changes that make the biggest difference over time. You don’t need to be rich, you just need to be savvy. In this post I’ll share tips from my own journey to mortgage-freedom to give you some ideas for how you can begin to pay your mortgage off early.
Before you start overpaying your mortgage
There are a few things that I recommend doing before you start to pay your mortgage off early:
- Pay off any loans or credit card debts. Chances are that the interest rates on these are higher than your mortgage. Don’t worry, you can still use the suggestions in this post, just use the money to pay down your other debts first. Once you get started, you’ll be amazed at how quickly you can slay your debts!
- Find out how much you can overpay on your mortgage each year. Some providers will only allow a 10% overpayment per year and will charge you if you go above this. This information should be on your mortgage paperwork. If it isn’t then a quick call to your mortgage provider will give you the answer.
- Find out how to make your mortgage overpayments. You may be able to do this online, over the phone or in your local branch but it’s best to be clear how you’re going to do this from the start. Also check with your provider whether there’s a minimum overpayment amount.
Save money and stretch your budget
You might think that you have no spare money and can’t afford to make overpayments. I thought the same but I was wrong. With a few tweaks to your budget and shopping habits you’ll be surprised to find how many ways you can cut back. Below are some of the things I did to save money so that I could start to pay my mortgage off early:
- Create a budget. It’s important to begin with a budget so that you have an overview of your expenses. It will help you see where your money is going and what you can cut back on.
- Slash your grocery bill. I managed to save over £10 a week by making a few simple changes.
- Cut your utility bills. I cut my energy bills by over £300 by changing supplier. A few years ago I also applied for a water meter but because my provider couldn’t fit one they gave me a 50% discount on my water rates.
- Don’t be loyal. Use comparison sites to see if you can get a better deal on your home and car insurance instead of allowing them to automatically renew. I save an average of £70 each time I do this – not bad for an hours work!
- Use a cashback site such as Topcashback* to save money online when you shop. Make sure that you only purchase items that you planned to buy or you’re not really saving anything.
- Take advantage of freebies. There’s so much out there for free these days that you don’t always need to spend to get what you want. You can access free ebooks and audiobooks, get fit for free, access free mediation apps such as Insight Timer and get free ‘stuff’ from websites such as Freecycle. If you have access to the internet, you have a wealth of recipes, inspiration and instructional videos at your fingertips.
- Borrow instead of buying. I’m a huge advocate of borrowing things from my friends and family members and they do the same in return. We swap and share items that we don’t use every day such as hedge trimmers and power tools. It money saving, space saving and the possibilities of what you can borrow are endless.
- Car share. If you drive to work, consider car sharing with a colleague who lives nearby. If you live close enough then walking or cycling to work may be an option. You’ll save money and improve your fitness.
The list above may feel overwhelming, don’t worry, you don’t need to do it all at once. Pick one thing a month or one thing a week, start making small changes and go at your own pace. The journey to being mortage-free is a marathon not a sprint, the most important thing is to get started.
Simple ways to make more money
If you’ve trimmed your budget to within an inch of its life then consider ways you can make more money to boost your overpayments and pay your mortgage off early. I’m sure you’ll have a few ideas of how to do this already but I’ve listed some suggestions below:
- Sell your stuff. There are so many places to sell your unwanted items both online (Ebay, Facebook Marketplace, Gumtree) and offline (markets, carboot / garage sales). Listing items is quick and easy and it’s a great way to declutter. I’ve learnt that one man’s junk really is another man’s treasure and have been amazed at the things I’ve managed to sell.
- Get creative. If you have a skill then consider setting up your own mini business selling your creations through sites such as Etsy or Facebook. I have friends who have done this and now make a decent amount of money through their side business. We have a world of opportunities at our fingertips and are only limited by our imaginations.
- Make money online. There are some great sites out there where you can make money or earn points for completing surveys. A few that I have used are Prolific Academic, Qmee, Swagbucks* and i-Say*
- Do some overtime. Doing extra hours at work is another way to bring in some extra money to put towards your mortgage. I did some tuition through work to help bulk up my monthly overpayments. If overtime isn’t an option then consider what else you could do for a few hours a week. Perhaps you could deliver pizzas, offer a dogsitting or dogwalking service, wash cars or start a gardening side business.
- Take in a lodger. If you’re in the UK you can currently earn up to £7,500 tax free under the Rent a Room scheme. However, it’s worth checking how this will affect you personally as it can have an impact on means-tested benefits. Always do your own research.
It’s very easy to think that you don’t have any spare time to make money, I felt the same and then I started to look at how much time I was spending watching TV or on social media. If you can free up even 30 minutes a day then it’s enough time to begin making some extra money. Afterall, would you give up 30 minutes a day so that you could pay your mortgage off early and regain years of freedom? I would!
Staying motivated
One of the challenges when you decide to pay your mortgage off early can be staying motivated. Once the initial excitement has worn off it can be difficult to keep the momentum going. There were times when I lost motivation and focus, it happens to us all. As long as you treat it as a minor blip then it isn’t a problem. However, I did have a number of strategies up my sleeve to help keep me motivated:
- Join a community. The Debt-Free and Mortgage-Free Wannabee forums on the Money Saving Expert website are great places to meet like-minded individuals and share stories and tips. These were invaluable in my mortgage-free journey. Similar communities can be found on various social media platforms. So take a good look round and find one that resonates with you.
- Make it fun. Set yourself different challenges to help keep things interesting. I currently have a no spend day challenge running on Twitter (feel free to join in). You could also do a grocery or storecupboard challenge where you try and keep your grocery costs as low as possible or use up those lurking food items (both of which can lead to some interesting meals). For Christmas presents, try setting a theme and a budget. We recently did a ‘funniest gift you can find for £5’ theme and the results were hilarious! Mix it up a bit by incorporating a few simple money saving games to keep it interesting.
- Plan rewards. When you hit certain milestones then plan a small reward to celebrate your achievement. It could be a take-away, a day trip or a low-cost pamper evening. But make sure you take the time to acknowledge how far you’ve come.
- Use a mortgage overpayment calculator. Keep putting your figures into the mortgage overpayment calculator. Seeing the impact of all of your hard work really does help to keep you motivated.
Take the first step
Now that you’re armed with some ideas to help you pay your mortgage off early, it’s time to take the first step. At the risk of sounding like a broken record, remember that it’s a marathon and not a sprint so don’t expect to be able to do everything at once. Establishing new habits takes time, so pick one thing and get started and don’t forget to take time to enjoy the journey.
I hope you’ve found this post useful. Let me know what steps you’re going to take by leaving a comment below or feel free to contact me if you’d prefer to get in touch privately – I’m a real person so don’t be too surprised when I email back.
Disclaimer – This post is aimed to offer inspiration for anyone wanting to become debt or mortgage free share. I’m not a financial advisor so please use your own judgement when deciding to take any action relating to your finances and always do what works best for you… There are also a few affiliate links in this post which are marked by an *. If you click these and sign-up then I may get a small commision which will contribute to the costs involved in running this blog…OK, boring bit over.
Image by Mangopear Creative on Unsplash