Wouldn’t it be great to be free from payments and interest rates? And be able to live mortgage free.

Obtaining this freedom is attainable for everyone with the right knowledge and motivation to achieve this liborating goal. 

You being here means you have an interest in having more freedom financially. 

This post is a how-to guide to living mortgage free.

You may also want to take a look at ‘5 Step Guide to Start Your Debt Free Journey’

This article may contain affiliate / compensated links at no extra cost to you while still supporting the blog. For full information, please see our disclaimer here.

1. Only Purchasing Upfront

The first is a mindset that is used on a day-to-day basis.

It is getting used to the fact that it makes sense to buy only with the money that you have, right here and now.

There are marketing deals everywhere for buying new computers, new bikes and other large expenses on credit.

Meaning you can pay it overtime per month in the future at a specific interest rate.

While spreading a purchase out into smaller chunks may sound quite nice and easy, all this does is prolongs and increases the purchasing price over time.

Having to pay more than what the item your buying is worth isn’t appealing to most! And yet many fall for these deals. 

Instead, wait the weeks/months it takes to have the money, determine if you still need it and pay in full upfront. 

2. Cut The Boring Expenses

Taking a look at your monthly expenses and figuring out which ones can be reduced will give you the boost to be able to pay down your debt faster. 

Find those expenses that don’t give you joy or value in any way and reduce them as much as possible!

Why spend more than needed on these things, right?

Look at ALL the expenses in the last few months, not only the automatic transfers but the expenses that you seemingly don’t take notice of when the credit card gets swiped.

There can be quite a large sum that could be going towards becoming mortgage free.

3. Downsizing and Living Tiny, Mortgage Free!

My favourite. Living Tiny. 

Downsizing in a way that still fits your needs will give you the option of freeing up your budget.

This could hereafter be used to pay down the annoying debt weighing on your shoulders. 

Now, it doesn’t mean you have to fully downsize to a small tiny house of 20 m².

But downsizing in any way could make a big difference to how big your expenses are every month. ‘

Is it an option for you to downsize in any way? 

We’re going tiny in Nov. 2019 in Denmark so we can live mortgage free. Feel free to check out how the build is coming along. 

4. Good vs Bad Mortgage

Purchasing a house can be a good investment over a longer period but it can also be quite a bad one if you’re unlucky.

It’s true yes real estate does increase over time as an average and the return is tax-free when selling at some point.  

But over this period you have running costs and monthly expenses which are yours alone that you have to take into account.

There is also a risk of house prices in the area decreasing over a over time which can be quite devastating.

A good mortgage, is this possible?

The positive aspects of a mortgage could be, as an example, an investment of a house where the plan was to rent out half the house. 

Otherwise know as ‘house hacking’.

The benefits of this are being able to take the rental income from one half of your house and paying the total real estate running costs for you as the owner.

Another great option for renting out is Airbnb which is shorter-term stays. 

See how we earned 60% of our yearly rent using Airbnb

5. Crank Up the Payments 

Do you want to get rid of that annoying mortgage? Crank up the monthly payments!

Increasing the size of payments will reduce the time it takes to pay off and more importantly reduce the interest that is added over time.

Renegotiating with your bank the length of the mortgage is one way to increase the payments.

The difference between a 930.000 dkk ( 125.000 € ) mortgage:

Over 20 years = Total to be repaid = 1.358.000 dkk  ( 181.794 € )

Over 30 years = Total to be repaid = 1.605.000 dkk ( 214.836 € )

247.000 dkk ( 33.042 € ) difference!

Play around with a loan calculator and see how the differences can be. 

In some cases, you also have the option of manually increasing the payments per month if allowed.

Keep an eye out for extra fees when wanting to crank up the payments.

And if there are fees, bundle up your extra savings wanting to go towards the mortgage payment and go for it every 6 months or so.   

Save that interest!

6. Find the Best Interest Rates

When was the last time you took a look at the interest rates on the market?

Even small reductions in interest rates can have a huge impact on the total amount paid after 30 years. 

An example of a 1% difference in interest rate when getting a mortgage:

930.000 dkk ( 125.000 € ) mortgage over 30 years at 3 % = Total to be repaid : 1.190.000 dkk ( 159.366 € )

930.000 dkk ( 125.000 € ) mortgage over 30 years at 4 % = Total to be repaid : 1.348.000 dkk ( 180.462 € )  

1% difference, in this case, means an extra 21.096 € in total! 

Use this loan calculator to see how much interest can be saved by reducing the interest rate by 1 %. 

Love watching a series? Learn more about living debt-free with channel 4’s free series: ‘How-To-Live-Mortgage-Free-with-Sarah-Beeny’ 

7. Any Extra Income? Wipe Out Your Mortgage 

Extra income or bonuses can be a great way to obliterate (dramatic!) your mortgage with extra payments and help you become debt free a lot faster.

Some people when receiving a bonus, quickly have the thought of ‘what can I treat myself to after a great piece of work now completed?’.

Would it be a treat to be able to live mortgage free sooner than what the bank has told you?

This is the concept of delayed gratification.

Being able to understand that putting the money towards the mortgage now will save you substantial interest rates on the other end. 

In other words, you’ll have more money later in life to enjoy! 

This is also the important concept of investing in financial freedom, which is the next step after being able to live mortgage free.

My goal is to become Financial Independent With FIRE. What is FIRE?

Extra money on your bank account at the end of the month?

Treat yourself to being able to live mortgage free sooner. 

To Sum Up

• Wait to buy stuff until you have the money. Save the interest!
• Reduce all expenses not giving you joy or value
• Downsize to what you need and not what is nice to have
• Understand whether your house is a good or bad mortgage
• Increase your monthly mortgage payments and save thousands
• Check the market regularly for the best interest rates
• Extra income and bonuses can accelerate your journey towards living mortgage free

Living mortgage free is a goal we all can reach with the right tools and habits!

Start yours here  ‘5 Step Guide to Start Your Debt Free Journey’

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Love reading books? 

Two top rated books on how to live mortgage free and as the ‘Barefoot Investor’ states ‘the only money guide you’ll ever need!’

Click to read the reviews: