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Mortgage Free in 5 Years?

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This week I was reading through Jax’s post on her new blog – The challenge – and my mortgage statement which, quite by coincidence arrived on the same day. Through Jax I also found Mortgage Free in Three. To say I was inspired is an understatement.

I’ve decided that we should be aiming to pay off our mortgage within 5 years.

Karl doesn’t think it’s possible. Karl thinks we should be aiming for 10 years. I think he’s being cynical. We have just less than £82,000 to pay off and that’s less than the lady who’s trying to pay her mortgage off in 3 years!

I see it this way: if we continue to tighten down the budget, if we continue to optimise the way we buy to reduce unnecessary spending, if I continue to push my alternative revenue streams alongside my main dev income (and get through more of that too) then we can end a month with more money leftover. More money leftover is more money to put into the mortgage.

Here’s what I’m thinking:

  • Ebaying — I’ve got at least £300 worth of computer bits, DVDs, books, clothes etc that I could shift
  • More hardcore budgeting — going cash-only so I don’t spend a load on non-essentials using the debit card
  • Cut backs — figuring out where the money is currently going and where I can save; yes, ordering from Riverford is convenient and stops the “£20 on chocolate when all I wanted was a pint of milk” shops, but so would taking the right amount of cash…
  • Gardening — we did OK in the garden last year despite the weather. I want to get this rolling again, but also plan better this year.. what are we going to eat?
  • WAHMweb Network — if I can get a few signups on this per month this is will be a boost; I need to implement an affiliate system
  • Affiliate marketing — I’ve been dabbling with this on niche blogs for years but never got very far because I’ve not put the effort in. I reckon I can increase payouts with a little more effort (& possibly by getting Karl blogging!)
  • Delegation — outsource bits of my work to other people so I can concentrate on the harder/more intensive stuff, which in theory will increase the amount I’m getting done, increasing the income

Of course I’m also conscious that it’s counter-productive to spend 3 hours a week doing something that will save me £5 when I can charge that time out at ~£100. I need to balance the above points and see if I can make use of free time better.

I don’t know, maybe I’m insane for thinking we can do this.

Jem Turner +44(0)7521056376

20 comments so far

  1. Tanya said:

    Our aim is very similar in terms of years, but we did it a different way… we took out a mortgage of approximately the same value as our yearly income (which isn’t that high). Very low repayments over a very short time, and we don’t have to compromise much on our spending. The downside of course is that our house is small and not in a great area, with no garden, but it was the right path for us as we’re not great with day-to-day finances. All the more reason for us to be mortgage free as soon as possible!

    I wish you the best of luck and have little doubt that you can pull it off so long as you stay determined. And then you’ll have the best of both worlds, all thanks to your own hard work. :)

    • Jem said:

      This is a small house in a relatively ‘cheap’ area, and put a big whacking deposit on so we’re lucky in that our repayments are fairly low (compared to how much we spent on renting) but it’s still a big chunk of our crappy monthly income, so this will certainly be a challenge!

  2. Chantelle said:

    Good luck! I don’t see why it wouldn’t be possible. I just hope that you and everyone else saving like crazy remember to take vacations and create many wonderful family memories by having experiences that may not fit neatly into the austere lifestyles these budgets seem to dictate.

    But I don’t have a mortgage and I never want one (but we’ll see how that works out).

      • Chantelle said:

        Oh sorry – I didn’t mean for my comment to sound like children were these great expenses (even though they are :P). I meant that if you’re at all like me, you might get so caught up in gardening, working, discovering new ways to cut back, and saving money in general that all of that stuff starts to take up too much time, time that would be better spent playing and making memories with family even if the time outs from all the money saving endeavors do mean meeting the goal in 3.5 years instead of 3.

  3. MrsB @ Mind over Matter said:

    That’s definitely not in our plans – we have paid off 50% of the house value but the remaining amount is still 3 times more than yours! I have to say I’m not scared of the mortgage and am not willing to give up organic food and chia seeds to pay it off faster :)

    • Jem said:

      With our relatively low incomes and the uncertainty of mine since going self-employed, I think for me, making a few sacrifices for the next X years means that when the final payment goes in I could then bathe in organic food and chia seeds if I wanted to ;)

      It’s nice to think that by the time we have child #3 (IF!) we could have negligible mortgage left. That would make life easier!

  4. Rhys said:

    Interesting post, something I’ve thought a bit about.

    I’m not in a mortgage yet, not that I have any desire. Was told always to have an unbelievably seemingly impossible lofty goal, and mine is to never have a mortgage, or paying for as much of a house as possible. Good luck! :)

    And yes, implement an affiliate system :P

  5. Katy said:

    in 5 year’s time I’d just like to be in a position where I have a mortgage….

    you may well be insane for thinking it – but it doesn’t hurt to try! just as long as you don’t drive yourself crazy obsessing over every last penny :) life is there to be enjoyed, and the odd bit of frivolous spending isn’t going to ruin everything

  6. liveotherwise said:

    Am pleased to have been a part of the inspiration, and thanks for linking. I’m wondering about affiliate stuff as well, want to share any hints and tips on it? I reckon we can do this.

  7. Melissa said:

    I’m with the above commenter. In 5 years, I’d be happy to HAVE a mortgage! We’ve paid so much in rent for the 5 years we’ve been together that we could have bought a pretty damned nice house. I hope to one day be settled permanently somewhere so that we can actually purchase a house.

    • Jem said:

      That was the problem we were having pre-mortgage – having spent a huge portion of money on rent. We could have paid off a third of the overall mortgage with it!

  8. Amelie said:

    I’ve had my mortgage for 5 years, and only paid off just under a 10th of it. I’d like to be rid of it ASAP since I desperately want to move, but the housing market took a nose dive just after buying this place so I’m looking at negative equity despite having put a nice deposit down :(

    Does your mortgage have any minimum repayment terms? Mine did – won’t let you pay more than a certain amount back per year for the first 5 years, I think it was. Watch out for that if yours has it :)

    • Jem said:

      We have an early overpayment charge of something like £1600, or a percentage of the overpayment where it goes over 10% of the overall mortgage left, but by my reckoning if we can get the mortgage paid off much quicker we could easily save that on interest not paid!

  9. Amanda said:

    UK property prices and mortgage rates continually astound me. I have a 30 year mortgage, and with interest rates the way they are, the minimum repayment is $1600AUD a month – or over 1000 pounds a month. That’s just the minimum…

    • Jem said:

      Well, it’s a bad time to compare. The Bank of England base rate is only 0.5% at the minute. We ‘got lucky’ in that we were ready to buy when the market hit rock bottom, and that we’d both got enough savings to put down a significant deposit (25%)

  10. Tara said:

    I don’t think you’re that insane…but I have a similar plan. I am a huge believer in setting aggressive goals or you won’t get anything done! So even if I don’t make it in 5 years, I’ll still have done far better than if I hadn’t set that goal in the first place.

    My mortgage has no pre-payment penalties though, which makes this far easier to do. I’m curious to hear more about how UK mortgages work though :)

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