Paying off a mortgage can often be a long-term commitment, with the standard amount of time usually at 25 years or more. While many are satisfied to spread their repayments over a longer period of time, some have opted to aim to rid themselves of mortgage payments as soon as possible. A mortgage loan is secured against the value of a home until it is paid off, and payments are expected on a regular basis.
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However, at an age where some Britons are still attempting to get on the property ladder – often a challenging feat within itself – one person shared how they were able to pay off their mortgage at 27.
Taking to the website Reddit, the homeowner revealed their long held desire for a home, and the steps they took to pay off their mortgage.
They wrote: “Today I’m mortgage free – at 27! My only goal in life has been to have my own home. I started saving when I was 15 and got my first proper job, and because I didn’t have any bills I could save it all in my ISA.
“I worked there until I moved to London at 18 for university where I worked as bar staff for an events company.
“I kept costs to an absolute minimum – I’d walk everywhere or get the bus (£1 for any trip) even if it took ten times as long. I only bought reduced food at the supermarket or rice/pasta. I did as many free things as I could and still had an amazing time!”
The social media user described their move back to the North East of England, and how they began to look for properties when they turned 25.
They continued: “By the time I was 25, I had around £65,000 saved. Had an offer accepted on a flat for £75k, and got a loan to cover the remaining amount.
“I paid off the loan in 14 months thanks to my formula. Every single time I got a bonus, sold something on eBay, got birthday cash or a refund – I overpaid my loan.
“This has only been possible due to my absolute obsession with having a home. I never cared about buying clothes, or going out, or being hungry.
“I just wanted somewhere that was all mine and couldn’t be taken away, and now I finally have it!”
The Reddit user says they are now in a financial position to travel the world, with many social media users congratulating them for the achievement.
They plan to start making savings to purchase their next property upon their return.
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The organisation Bankrate has offered tips on how to pay off a mortgage early.
It states mortgage terms can be shortened, however, this will mean increased payments over a shorter period of time.
In order to take this step, Britons must ensure they have the financial capability to meet these increased payments.
Another way to pay off a mortgage early is to overpay, in a similar way to the Reddit user.
Bankrate states overpaying is another way to eliminate debt quicker, but only if the lender allows overpayment on the particular mortgage – otherwise the mortgage payer may have to shell out money on a charge.
Other ways to pay off a mortgage include paying fees upfront, or remortgaging.
While paying off a mortgage early can save thousands in interest payments, Britons should consider whether they can make this increased financial commitment.
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