Thrifty couple now debt-free after paying off their mortgage 28 years early
A THRIFTY couple have paid off their £95,620 mortgage 28 years early.
Siobhan Bowen, 36, and husband Lee, 38, bought their three-bed semi for £112,500 in 2011, when on a combined £40,000 wage.
The loan started at £394 and they overpaid £160 a month by budgeting.
They still enjoyed holidays in New York, Croatia and Italy, as well as riding out spells when Siobhan took maternity leave or was out of work.
Siobhan, now a financial planner of Great Wyrley, Staffs, said: “We became disciplined and educated ourselves with money-saving podcasts.
“Over seven years we repaid £112,924.57, saving £57,288.71 over the mortgage’s expected lifetime.
“There was no inheritance or secret lottery win.
"It was done through hard work and saving.
“Being debt-free has given us security, freedom and peace of mind.”
The Sun has previously also spoken to Leon Oczeretnyj, 31, who paid off his £84,000 mortgage in nine years.
He managed to do it by avoiding nights out, selling old Nintendo games and overpaying on his loan by 10% each year.
How to pay off your mortgage early
WE round up how to pave the way for mortgage freedom.
- Switch your mortgage to a cheaper deal: The first step towards mortgage freedom is to switch your home loan to the cheapest one, which works as long as you're not already locked into a fixed rate. Borrowers are transferred onto their lender’s pricier standard variable rate (SVR) when their deal comes to an end, pushing up prices by £2,040 a year on average.
- Shorten your mortgage term: It's not just switching from an SVR to a fixed deal that can help you to cut costs - you can also save cash by cutting the length of your mortgage. Just keep in mind this means increasing your monthly payments.
- Cut household bills and set a savings goal: Once you’ve cut your mortgage costs as low as possible, it’s time to go through your other bills and set a savings goal - but make sure you are reasonable.
- Overpay on your mortgage: If you’ve managed to cut your spending and save cash, it could be time to overpay on your mortgage. Just be aware that while being mortgage-free is a dream for many, you likely won’t get hold of the cash you use to overpay again.
- Consider switching to an offset mortgage: If you don’t want to lose the overpayment cash forever, you may want to consider switching to an offset mortgage. The loan keeps your mortgage debt and savings in separate pots with the same bank or building society. The cash savings are then used to reduce - or offset - the amount of mortgage interest you’re charged.
Most read in Money
If you're not yet on the property ladder, we explain how to find the best mortgage for you including lenders offering "no deposit" mortgages.
Meanwhile, a couple share how they got their dream £325,000 two-bed house without getting a mortgage.
Meanwhile, home buyers can now fix their mortgage for 40 years.