For many Aussie families paying off a mortgage is where most of their weekly wages go and it seems like you’ll never be able to pay it off.
But Western Australian couple Tammy and Rob Pitman managed to pay off their $365,000 home in just four years.
Tammy and Rob Pitman paid off their $365,000 home in four years thanks to strict saving and very frugal living. Source: Today Tonight
In 4 years their home was paid off and they made a lot of sacrifices to do it
The couple bought their home in December 2011 and paid it off by Christmas 2015 and Tammy believes they only paid around $7,000 in interest.
“By 27 we were debt free,” Tammy told the program and revealed they did it without any handouts, a lotto win or an inheritance.
Tammy and Rob saved up a 20 percent deposit and found a house that was well within their means.
Then, they put in the hard yards by renting out the property they had just bought and moving to regional Western Australia to boost their wages.Next they put a strict saving plan in place and got very frugal with their cash, they paid double the minimum repayment back every fortnight, never touched the credit card, cooked all of their own meals and went on simple holidays.
After they bought their house they rented it out and moved to regional Western Australia to bump up their income. Source: Today Tonight
“The way we saved wasn’t realistic for us to live our whole life”
“I think it’s the small sacrifices that actually can make sometimes the biggest difference when it comes to actually saving money and paying off a house,” Tammy explained.
But Rob admitted the four frugal years pushed them to their limit and living like that wasn’t something they could do forever.
“The way we saved wasn’t realistic for us to live our whole life, it wouldn’t have happened, we would have burnt out,” said Rob.
“Paying the big chunks off early and getting that interest right down is a big deal,” he added.
They bought a house within their means. Source: Today Tonight
You don’t have to go to the extreme lengths they did to pay your loan back quickly
Rob and Tammy did go to the extreme with their repayments and the lengths they went to for paying off their mortgage which not all families are able to do.
But financial comparison and research agency Canstar explained there are ways to pay off a mortgage quickly that don’t involve moving to the country for extra wages.
One of the first things to do is buy within your means and look for the lowest interest rate on the market, then Canstar recommends these tips.
- Increase repayments an extra $200 a month. It will save you almost 60k ($59,438) on a $300,000 loan and will take six years off the life of your loan.
- Use an offset account, one that’s linked to your loan account.
- Increase the frequency of your repayments. For example if you make fortnightly repayments in the year you’ll get an extra month of repayments done.
Tammy and Rob went to the extreme with their repayments and admitted they couldn’t live like that forever. Source: Today Tonight