You may think that having no mortgage payment will never be a reality for you, but I am here to tell you, that it can be. We aren’t a crazy frugal couple that lives off of rice and beans. We vacation and enjoy life, all while paying off our mortgage a little faster each year. Despite losing my job, we were able to stay the course and become mortgage free by 40 (for me not my hubby).

 How did we do it? Slowly but surely! Check out these 4 actions we took to achieve mortgage freedom!

1 – Accelerated bi-weekly payments. This is essentially taking your monthly mortgage payment dividing it in half and having that be your bi-weekly payment. This means that you are making the equivalent of 13 monthly payments each year. If you are paid bi-weekly, chances are that this will make your life easier AND get your closer to mortgage freedom.

2 – Increase your payments if you get a raise or promotion.  For most people, when they get a raise, the additional income causes lifestyle creep (your spending increases to absorb your increase). Ditch the lifestyle creep by bumping up your payments the same amount as the take home portion of your raise. We were easily able to do this online. It even showed up how much the small change would save us in interest and mortgage length. For me, this was super motivating!

3 – Making additional one-time payments. If you receive a bonus, or are Canadian and pay off your CPP and EI every year, you can transfer ‘found’ money to a separate account and make a payment at the end of the year. These payments can really take a huge dent out of your interest payments!

4 – At renewal time, get rates from more than one company. I am loyal like crazy to service providers that I love, but not at the expense of 1000’s of dollars (or even 10’s of 1,000’s of dollars). If you love your mortgage specialist, and you have an offer with a lower interest rate, talk to them about it. Be open and let them know you are getting other rates. If you don’t have someone helping you with your mortgage that you love, it’s time to start looking for someone you get a good feeling from AND provides you with great service.

A FEW CAUTIONS:

1 – Do not make extra payments on your mortgage if you are carrying high interest debt. All of your extra money should be focused on decreasing your debt. You can apply the three steps above to get focused on your high interest debt. Yes, even #1, if your monthly credit card payment is $400, paying $200 bi-weekly will mean you are making 1 extra monthly payment/year. As your balance goes down, and your min. payment decreases, keep paying the same amount!

2 – Make sure you clearly understand the rules around increasing and making extra payments on your mortgage, so you don’t incur penalties. If the penalties outweigh the benefits of making the extra payment, set up a separate savings account to make a payment to reduce the balance at your next renewal.

 I wish you success on your path to mortgage freedom!!

-Sherry