Want to pay down your mortgage quickly or even save for a deposit for your home?
Well Kim and I have found a solution, and it’s not rocket science either, because we’ve done it and are living it.
We have found that the simple practice of living a more sustainable lifestyle and living within your means is the key to successfully paying down your mortgage quickly.
There’s no magic formula. No ten step process.
Just honest to goodness living as well as growing some of your own food, cutting down on consumption, and banging as much spare cash as you can onto your offset mortgage account, you can save a small fortune in interest payments.
Here’s the key. By using an offset mortgage account when you first take out your mortgage, any extra money you put into that offset account gets offset daily against your outstanding loan balance, therefore reducing your loan term.
Not only do you save swags of interest, but the actual mortgage gets paid down quicker.
We treat our offset account like one big savings account, throwing as much as we can into it. We can draw some cash out if we need to without any fuss but it takes a few days to appear in our normal bank account which often stops any impulse buying.
All the time that extra money sits in your offset account, the better off you are in the long run because it is reducing your loan interest each and every day.
Now this is only my opinion as I am not a registered financial adviser, but let me tell you that as we started to live within our means, our mortgage has dropped significantly.
So it goes without saying that if we can do it, you can too!
Just to prove that there’s no magic behind our method, here’s a National 7 News spot I did last year about how living a more sustainable lifestyle can help enough save money to pay down your mortgage quick smart!
And the great news is that we’re still on track to be mortgage free for late next year. That’s when the fun really starts!
Marijke Van der Vlist says
As a business owner, there is always money for taxes, GST and super floating around, accumulating until its due date comes up. I sure love our mortgage offset account!
That was my favourite post yet. I loved getting to ‘walk’ around your garden and see the bounty on your kitchen bench. Sure to inspire others.
I don’t have a mortgage offset account but I do put all of my savings for my tax bill onto my mortgage until it needs to be paid (I’m self-employed) and I think this has the same effect.
A friend who has an amazing record paying off houses does it by putting little amounts in regularly. For example, she sells a couple of items of kids clothing on ebay for $15 – that goes on the mortgage. A little bit here and there really adds up, and she will be debt-free long before most even though she is a single parent working part time so she can be home with her kids.
Gavin Webber says
Thanks Madeleine! It was a nice little stroll around the patch.
Very interesting about your friend. It’s a great way to save/pay down at the same time.
Interesting Gav that living sustainably helps finacially – often in ways never imagined. With the current credit crunch for property investers, lenders are requiring proof of personal spending. Not a problem if you buy 2nd hand, recycle, reuse and restore and especially if you have a sustainability blog documenting your journey – great to back up your spending claims to a potential lender (if you know what I mean).
Gavin Webber says
I do know what you mean Sarhn. You make a good observation and a blog such as ours could be used in that manner, although I don’t know how much standing it would have as “official’ proof.