A couple who managed to pay off their mortgage 28 years early say they were inspired by money-saving podcasts - and are now debt-free before 40.
Siobhan Bowen, 36, and husband Lee, 38, bought their three-bed semi for £112,500 in 2011, when on a combined £40,000 salary.
Their repayments started at £394 a month, which, at first, they would pay off each month, however as the years passed, the parents decided to try overpaying to avoid a longer term loan with more interest.
The couple from Great Wyrley, Staffordshire, started overpaying by £160 a month, using advice they learnt from listening to money podcasts.
“There was no inheritance or secret lottery win,” Siobhan, now a financial planner of Great Wyrley, Staffordshire, explained.
"It was done through hard work and saving.
“Being debt-free has given us security, freedom and peace of mind.”
They still enjoyed holidays in New York, Croatia and Italy, as well as riding out spells when Siobhan took maternity leave or was out of work.
Siobhan said: “We became disciplined and educated ourselves with money-saving podcasts."
The couple said they made careful overpayments, speaking to their lender, budging essential payments and even stopped buying gadgets so they could say goodbye to their mortgage.
“Over seven years we repaid £112,924.57, saving £57,288.71 over the mortgage’s expected lifetime,” Siobhan added.
Most banks and building societies will allow you to make overpayments of 10% or less of your original mortgage balance “per mortgage anniversary year" without incurring an early repayment charges.
However, check the small print as other lenders will allow you to overpay 10% of "the previous year-end balance of your mortgage each year", so the amount you can overpay goes down each year because the amount you owe also goes down each year.
Once you meet this threshold, you may have to pay 1% to 5% in fees each year – so speak to your lender or broker before signing a mortgage that you know you’ll be overpaying on.
If you’re trying to get on top of your repayments, cutting the interest also helps.
At the end of your fixed mortgage term, most buyers will be transferred onto their lender’s pricier standard variable rate (SVR) pushing up prices by £2,040 a year on average.
However, you can beat this by fishing around for a more competitive rate for your loan – this will instantly reduce how much you pay in excess interest.
Reducing your mortgage term will also speed things up – if you can afford it.
This means higher monthly payments but also that you will be mortgage-free sooner and will pay less in interest in the long run.
Detoxing your finances is also one of the easiest ways to overpay.
Cancel any old subscriptions, unnecessary insurance and be smarter with your bills and what payment plans you’re on. If you’re out of contract, haggle it lower or switch for instant savings.
Bear in mind that if you make overpayments, you won’t be able to access that money if you need it later down the line – so it’s not an alternative to savings.
Have you got a debt-free story to tell? Get in touch: emma.munbodh@mirror.co.uk
Always make sure you have a rainy day fund for emergencies as this will protect you if the unexpected happens.
If you don’t want to lose the overpayment cash forever, you may want to consider switching to an offset mortgage.
Through this, the loan keeps your mortgage debt and savings in separate pots with the same bank or building society.
The cash savings are then used to reduce - or offset - the amount of mortgage interest you’re charged.
5 money podcasts to get on top of your finances
Cash Cows
A weekly podcast about money, how it’s spent, where our habits come from and the financial mistakes we’ve all made.
Money 101
Particularly useful for ambitious young people at university, those building their savings pot, looking to buy a house or get on top of debts.
It also has a helpful Q&A, allowing listeners to write in for specialist advice on their own money matters.
It’s hosted by journalist Bea Duncan and features personal finance expert and journalist Kalpana Fitzpatrick.
Which? Money
A weekly round-up of news, tips and money advice from experts Lucia Ariano, Gareth Shaw and Jenny Ross.
Which? also has a large catalogue of podcasts that you can go through and listen to, ideal for personal money goals such as mortgaging or paying off loans.
Informed Choice
This podcast is a mix of the latest financial news as well as advice that will help you invest and manage your long-term finances.
Every week, the founder Martin Bamford delivers news updates - that could be anything from a change in the law that will impact your finances or the latest fraud you need to know about - as well as talks with authors, experts other inspirational people that will help you take action with your finances.
Planet Money
This podcast, which is made by NPR in America, first launched in 2008 during the financial crisis - so there are lots of episodes to go back to if you’re curious and want to learn more.
It aims to explain what’s on with the economy in a relatable and informative way.
