so I bought and moved into my house on February 1, 2000 – my 39th birthday! I held off moving in for a couple of days so it would be a birthday present.
I also bought a house that was realistically priced for my income. I didn’t want a huge house because having previously lived in Japan for 6 years in my thirties, it influenced my thinking about how much space a person actually requires.
I purchased a comfortable 3-bedroom, 2-bathroom terrace with small front- and backyards. The footprint is not large but it is well designed and there is enough room for visitors. I also thought about choosing something that was easy to maintain if I was unwell, as I have Crohn’s Disease.
Although I initially preferred a freestanding house rather than one with shared walls, that would have been slightly out of my budget. I am glad now I stuck to it: the shared walls are not important to me and I prefer that there is less maintenance required.
After the first year, I always paid more than the mortgage payment and if any extra money came my way (through savings, money from tax return, for example) I put it on the mortgage so it was reducing quickly. I received a small inheritance in 2012 that enabled me to pay the mortgage off.
You do have to make sacrifices in order to be mortgage free. I only bought necessities to furnish the house, along with some dated furniture I had from my flat and things my parents gave me. The house style was very ‘minimalist’ for the first few years! But it meant I didn’t have any debt except for the house mortgage – and that meant I felt more comfortable.
I also drove a cheap but reliable second hand Mazda 121 (which I paid cash for) and didn’t buy another car until I could afford to pay cash for it. And despite my love of travel, I didn’t go overseas for seven years after buying the house.
I’ve had to endure my health battles while paying down my mortgage and, at one stage, my situation was severe enough to make me worry about losing the house. I had to work part time to manage doctors appointments and monthly day admissions to hospital. I couldn’t afford the loss in salary so I worked longer hours on the days I worked. Of course, this didn’t help my health and I spent most weekends recovering.
Six years ago, I paid off my mortgage, age 51. I no longer had to worry about losing my home due to my health. I didn’t have to work so hard and was able to reduce my hours, improving my wellbeing as a result. I was then able to consider early retirement from my role as a public servant. All in all, being mortgage-free has increased my sense of security, personal independence, confidence, wellbeing and freedom.
As well, I now have savings to deal with life’s emergencies or unexpected costs, or to be generous with family or charities (I have been making a monthly donation to charity since 2007). I also get to enjoy myself, especially through travel.
In short, life is more fun!”
If you too want to be mortgage-free, don’t expect to have everything at once. Here’s how I made it work:
With interest rates at an all time low, if the value of your property has increased since you got your home loan, your Loan-to-Value Ratio (LVR) has likely decreased – which is a good thing. It means you’re potentially eligible for a lower interest rate than you’re on now. You can plug in what you estimate your property is currently worth and get a read on the low rates you could be able to unlock here.