How I became mortgage-free at 35 (and now enjoy financial freedom)

The first strategy is to always pay more than the minimum.

Fifteen years after we first signed our lives away, we reached our goal of becoming mortgage free.

We queued at the bank to make that final mortgage payment, and found that with one simple transaction, one signature and the bank teller’s words of, “well done!”, the biggest moment of our financial life so far was done.

We still have the queue docket on the fridge to remind us of that momentous achievement.

To pay off a mortgage feels like an oddity in modern times, particularly while young (I was 35 and my husband 40 when we made that final payment), and lots of people have asked us what it’s like and how we did.

Hopefully this will provide a little insight for those who are looking to break the mold and aim towards a mortgage-free future.

How do you get to be mortgage free?

I can see why paying off a mortgage isn’t an exciting prospect for some: it’s years of slowly throwing money into one thing, while all the other needs and wants line up impatiently.

To us, though, watching that balance get lower and lower became a cause for celebration. That was a big key to getting it paid off: we celebrated when we reached a milestone amount and encouraged each other to stay on track.

In practical terms, we had three main strategies:

  1. The first was to always pay more than the minimum; at some points that was just a little more, and at other times we were able to increase our payments.
  2. Our second strategy was to keep a mortgage offset account. When we were saving for something else, for example, that money sat in the mortgage until we needed it, in order to reduce our interest.
  3. Third, any money above our standard salaries went into the mortgage. That meant all our tax returns and bonuses, and some of our pay rises over the years, went straight into the mortgage before we could dream up other ways to spend them.

We spent less on going out and on new furniture and gadgets, but still managed several holidays and some splurges that were deemed worthwhile.

Does the reality live up to the expectation?

The financial pressure has definitely lifted. We no longer have to direct thousands of dollars each month to the bank. After the household bills are paid, all the money we earn is now ours.

And that’s a bloody great feeling.

What lifestyle differences has it made?

To live without financial pressure is an incredible freedom.

It’s hugely affected the lifestyle choices we make. My husband and I have been able to take career breaks (at separate times) to care for our young children and to reassess what career turns we each wanted to take next. A lot of families think about how they can spend more time with their children, and easing the financial pressure was our way of achieving that.

Honestly, we’d imagined that without a mortgage we’d have money to splash around all over the place, but family-focused lifestyle choices (like taking on jobs that pay less but give us more time together) put an end to that idea.

What do you spend money on when you’re not paying off a mortgage?

Don’t worry, the money still flies out of our bank account!

After spending a fair chunk of our working lives paying off debt, we’re now very focused on boosting our super and investing money elsewhere. Like many families, we’re also saving up for our children’s secondary schooling and for other things so that we don’t have to go into debt again.

This article was originally published by Domain on 8 July 2018. It represents the views of the author only and does not necessarily reflect the views of AMP.


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