How to be mortgage free!?

[Whydoireadthis]

Hiya, I was wondering if there’s anybody out there who is mortgage free from overlying their mortgage, who’s done so with children/part time work and a household income of about £40k? I keep reading about it and it interests me but the only stories I come across are of household incomes of about £100k+!! My mortgage is around £700 per month and suppose I’d like some real life experiences and some bigger money saving tips then just ‘cancel unused direct debits’ and ‘taking packed lunches’ because I think I live frugally on most things anyway.
Any tips appreciated 😊
X

🙄 *overpaying, not overlying....years old iPhone with cracked screen’s fault(see, told you I’m scrimping!)😂

I think the only way is to be in a job that earns enough to overpay And live well within your means . We overpay every year with bonuses but if you need that money for other stuff it won't work .

Multiple streams of income and making xtra payments every year.

If you live frugally already then you simply don't earn enough to do it.

What are all these stories you've heard?

The only way to do it is by overpaying from saving money each month. To do this you can either cut your spending, earn more or swap to a better mortgage deal but keep paying what you are paying now. Unfortunately, these are the only options I think.

Have you looked at an over paying calculator, there is one on money saving expert. Even overpaying by a small amount like £20 can make a difference in the long run. We paid off a large chunk of our first mortgage by overpaying quite a lot each month (small mortgage no children). We’ve moved since and so we’re starting again but we’ve got a much larger mortgage we also now have 2 kids and all the costs that come with that so it’s a bit more difficult this time. What we’ve done is increased our mortgage payments by £100. This comes out at the start of the month so we basically just live off the rest and cut back. I would pick one area to cut back on such as clothes, bills or start to sell stuff on eBay etc and concentrate on that to pay for your overpayment. Whilst only paying off a small sum may feel less ‘worth it’ I would persist because it does make a difference and once you get the bug to overpay it you can look at other ways of paying off more. Good luck!

Rent.

👌

I know some people who are nearly there and who only recently started earning more than you, they've overpaid from the very beginning of their mortgage term - I remember a big discussion during DFriend's mat leave about reducing their overpayments for the year. When they first started it was only a few extra quid a month, but it's paid off, I reckon they're a few years ahead of their peers now and likely to pay off soon.

I also think a lot of people move in their late 40s to one last 'big' house which then puts them further down the mortgage term. So don't trade up may seem obvious but does have a big impact on when you can pay down.

Well you can only really overpay if you have spare money, hence why so many who do it are high earners.

Work full time or take on a second job. You need to earn more if you’re already scrimping.

I am not mortgage free yet but hope to be.

Start overpaying now, by as much as you can stretch to, it makes a huge difference.

Make sure you shop around for the best deal each time your deal expires but don't be duped by a low low rate that goes hand in hand with a sky high booking fee, you won't save much that way.

But ultimately becoming mortgage free relies on having lower lifestyle expectations than the income available and whilst the changes that are needed will be different depending on your income bracket the principles are the same. Look at the lifestyles of people who are a few steps lower down the income ladder than you, and adjust your lifestyle expectations according to what you would manage if you were a few £kpa poorer. Funnel those savings into your mortgage steadily. Be patient, it takes years.

As other posters have said, you can only overpay if you have spare money and no other more pressing debts. I did it on a modest income but my mortgage was low as the house is small - took me 21 years instead of 25.

@helloxhristmas

If you live frugally already then you simply don't earn enough to do it.

What are all these stories you've heard?

Well, whatever I’ve found by Googling ‘how to be mortgage free’. Just wondered if it was going to be possible a lot earlier than in twenty years. Thanks though☺️ Will give me something to aim towards I guess, new job hunt was getting stale so will try again! X

We paid ours off last year when I was 37.

Household income of about £600 PW after tax so definitely not loaded. We just lived very frugally, still had holidays but no takeaway coffees, meals out etc. I cut out takeaways and made my own at home so we still had a treat night. It was fine. And well worth it.

Save up for an income buffer (3-6 months essentials), then after that channel your monthly savings into your mortgage.

There was a tv programme on a while back called 'pay off your mortgage in 2 years' I've just looked and some of the episodes are on youtube. From memory much of it was finding other income streams. I think one couple spent practically nothing on food and were foraging, nettle soup etc. There was someone who made chimnea's They were interesting, but needed a much more practical character than mine.

Definitely Use an online calculator, don’t underestimate the impact of paying £20 extra per month it all adds up. Check you don’t have early repayment fees and that your lender doesn’t lower your monthly repayment to keep the term the same. Money saving expert has a whole chat board where you can read other peoples experiences, we have just paid our last payment before Christmas and I found it quite sad! It was a lot of hard work and planning to get to this point.

And then once you've paid off your mortgage, you save for your pension.

Obviously all those things can be tweaked, but apparently the most efficient way to do it while interest rates for savings are low. You'll 'save' more paying off your mortgage than any amount of saving!

We don't overpay but we have a plan of cutting the term by around 5 years each time we remortgage. So our mortgage payments go up slightly each time, but generally so have our wages so it works out (we're both public sector so not big earners but reasonably safe jobs). Aiming to have it fully paid off by the time we're 50

I did it by doing up a small house doubling its size, selling it at a major profit and then downsizing.

@billybagpuss

There was a tv programme on a while back called 'pay off your mortgage in 2 years' I've just looked and some of the episodes are on youtube. From memory much of it was finding other income streams. I think one couple spent practically nothing on food and were foraging, nettle soup etc. There was someone who made chimnea's They were interesting, but needed a much more practical character than mine.

I was going to mention this programme - it was really interesting. And yes - upping your income was more import than cost-cutting to do it.

There’s a board on the money saving expert forum with loads of real life diaries, I think?

@Covine

Rent.

👌

Thanks, will look into that programme. I need to think of other income streams but being unqualified in anything and not any major skills, I feel a bit thick sometimes and not as confident as I need to be when having interviews and suchlike. A whole other thread 😆.
Like I say, just interests me. While covids going on, I don’t think we’ll be going on our 1/2 holidays a year so thought I may as well plough the money elsewhere. X

Pay all your bills by direct debit.....and add a d/d or standing order for capital reduction of 1,2 or 3 hundred pounds a month to your bills. It sounds like you are doing everything else right, so you'll get there. We did......admittedly with, it would appear, the very last endowment policies on the planet that actually paid a small bonus on top of the "sum assured ". They were for the previous property's mortgage so the shortfall we made up by overpaying and my lump sum when I retired from full time NHS work. It was hard, especially when everyone around us was enjoying exotic holidays, expensive takeaways every week and new cars on the drive......they are all now, as far as we can tell, exemplifying the phrase "fur coat and no knickers "........and how we are laughing now, oh yes. #schadenfruede(spelling? #wgaf).