Money Monday: ten things I am doing to pay off my mortgage by Christmas

In January I announced that I would pay off my mortgage by Christmas 2016. Last week I caught up with two girlfriends for a frugal lunch.  “How is your goal of paying off your mortgage going, ” one of my friends asked me.  “I’m on track,” I told her.  There was some disbelief and she wanted to know how I was doing it.  So here is what I told her.

Ms Frugal Ears standing in the door of a house
All mine – standing in front of my front door on a cool winter Canberra day, visualising being mortgage free


  1. I refinanced to a lower interest rate with UBank.  I was previously paying 4.25% with another institution, which was actually comparatively low at the time and the service was also very good.  As part of my property settlement, I had to refinance my property into my own name so I took the opportunity to look around for a good deal. I was already banking with UBank and already liked how their online system worked, and the fact that they are backed by NAB. In January when I refinanced they had one of the best products for a home loan – 3.99% (no fees or charges). It has since decreased to only 3.74%.
  2. I checked out online mortgage calculators to work out what I would need to repay to achieve my goal.  There are a few calculators around, but I liked best the mortgage calculator on ASIC’s Money Smart website.   Doing this really brought home to me the importance of how little tweaks like a slightly lower interest rate or additional repayments (even $100 extra a month) can have a profound effect in the amount of interest you pay over the life of the loan.  I want to own my own home by Christmas so I worked out how much I would have to pay to do it. I go back to this calculator often when I need a bit of inspiration.
  3. I sold  investment properties. OK, so I guess that having investment properties with an ex isn’t something that everyone has to draw on. “It’s lucky for some,” a work colleague sniped when I mentioned that one property sold for a record price (this was a blessing, in amongst all the divorce angst, and also helped offset the fact that the next one sold at a loss). I wasn’t born with a magic silver spoon, and neither was my ex. And neither of us were on super high incomes – in fact, I was the main income earner in our relationship. We did get some money from his mother (since repaid), but for the most part our ten properties were acquired over a decade of working hard, living frugally and investing. Having homestay students for six years also helped.  The little bits added up.  It didn’t feel like we were making much progress at the time but now I can certainly see that it made a difference.
  4. I sold shares.  I invested in Vanguard index funds last year. I invested 10% of my take-home pay into Vanguard last year, following The Richest Man from Babylon technique (a part of all you earn is yours to keep).  I didn’t focus on paying off my mortgage last year as ownership only transferred into my name solely in January.  I really like the Vanguard product and will likely invest again at another time. But right now the priority is owning my own home outright, so my focus is on that.  I believe that with interest rates at a record low level it is also an ideal time to do so.
  5. I am earning extra rental income.  I rent out a granny flat in my backyard.  And from February, I have rented out a room in my home as well. “Aren’t you worried about lack of privacy,” people sometimes ask me.  Others are more blunt and tell me that I am very brave and that they could never do that – privacy is too valuable and it would be too hard to trust having strangers in their home. Well there are two points here. Firstly, the rental income nets me up to $20,000 extra a year that I use to pay off my mortgage.  Just stop and consider how many extra hours you might have to put in at work to earn that.  Secondly, far from losing my privacy I love the warm community I have created by opening up my home.  Before having a housemate I felt lonely and isolated,  and would sometimes work up in the middle of the night worrying about intruders. Now my boys play with the son of my granny flat tenants.  My kids loved playing with my last tenant (recently moved out as gone back home).  When it was warmer we would occasionally get together for a BBQ or a pot luck dinner – my previous housemate made the BEST chicken tikka.
  6. Scheduling regular, additional payments direct to my mortgage.  I am still implementing The Richest Man in Babylon technique this year, and ensure I always pay myself first.  I worked out what my mortgage repayments would be, then I added 10% of my take-home pay on top of that.  Then, just for fun, I doubled it so I make mortgage payments once a  fortnight rather than once a month.  The payments are scheduled to come out of my UBank ultra account so I don’t have to do a thing.  I never miss the money because I never had it.  You adjust to what you have to spend.  Simple.
  7. Whenever I make a saving, however small, I put it straight onto the mortgage.  Every single time.  Like last Wednesday, for example, I was standing in line at the cafe to buy a Florentine biscuit for $2.50 (I have long since given up takeaway coffees or teas).  My work has one of the best cafe bakeries in Canberra.  There are always temptations. “Do I really need this,” I asked myself. “It isn’t healthy and you want to reduce weight.”  Too right.  So while a part of me inwardly whinged that I ‘deserved’ a treat, the more virtuous side of me marched myself back up to my desk, ate a banana instead, logged onto Ubank, and transferred $2.50 to my mortgage via BPay.  This might not sound like a lot, but over the course of a month all the little savings really  add up. On average I save around $1,000 a month this way – last month I saved $2,800. Not just by avoiding eating biscuits but by bigger things, too (e.g. refunds for doctors visits, negotiating better prices on products really needed, or even better, discovering I didn’t really need to spend money on something and not buying it).
  8. Monitoring how my mortgage balance is coming down.  I think the real power to how transferring small savings to the mortgage works is that I am constantly focusing on my goal. Sometimes I log onto UBank more than once a day, and the first thing I always do is look at that magic number of the amount still owing on my mortgage.  I am noticing how regular, small additional repayments really do make a difference. It is so exciting.  So when for example I am standing in ALDI looking at Egyptian cotton sheets and imagining how much nicer they would look on my bed than the faded Elvis blue ones with mismatched pillow cases I currently have, the image of that magic UBank mortgage graph and the magic mortgage number comes up and urges me to gently walk away.  I am so close to achieving my mortgage repayment goal now, and I really want it.
  9. Reducing my grocery budget to below $10 a day.  I don’t find this too onerous, and I believe we eat very well.  I am certainly good at cooking meals that cost $5 to prepare.  Last month my spending was just over $11 a day, but it averaged just over $8 a day for the last two months.  And would you believe my cupboards are STILL bulging and my freezer is completely stocked.  I am finding that I seem to attract food.  I guess people know I am frugal, so they tend to give me things.  Which I always receive with gratitude.  And I am great at spotting items on special, and reducing food costs by homemade and other options.
  10. Earning extra income from writing. OK, so I am not earning enough to quit my day job (yet), but I am grateful for the validation that I am a professional writer. I love the feeling of transferring my creativity into writing, and how my writing income is in turn helping me own my own home.  And I am visualising the small trickles of money that I am earning from my writing turning into a fast flowing river (or perhaps even an ocean).

Using all of these methods, at the half-way point I am on track to meet my Christmas target. It will still be tight, but I have confidence I will get there.  That’s the thing about focusing on a goal using the Law of Attraction: when you are clear about what you want, and focused in gratitude on receiving it, somehow the universe provides.  Each and every time.

Are you focused on paying off your mortgage?  Or have you paid it off already?  If so, what methods did you use?



  1. I love this! We are focusing on paying ours off early too, we hope to have if gone by 2018. These tips are great thank you for sharing them. How exciting that you will be mortgage free by Christmas!

    1. Thank you for your comment and good luck with your own mortgage goals. Yes, it does feel very exciting to be able to see how close I am to this goal now. It is starting to really influence (in a good way) my savings decisions. I can see how each and every dollar counts.

  2. There are some great strategies here, Serina! That’s a big goal, but clearly when you break things down into smaller tasks and stay motivated it’s totally possible to get there in the end. Big party at the end if the year?

  3. Fantastic Serina. I totally agree that you have to focus on your goal. Without that focus it would be unachievable. It would be nice for everyone to have that single determined focus regarding paying off the mortgage however in reality most don’t. 6 months to go to achieve your goal.
    What will be your next focus I wonder??????

    1. Thank you so much for your comment. Next goals? Well, something frivolous – I want to go on holidays to Positano and stay in a boutique hotel that means ‘Serina’ in Italian. Then I have more serious savings goals.

  4. Hi fivebeansfood, definitely a big party at the end of the year. Or at the very least some sparkles. Yes, big goals do look scary. And big mortgages just kind of seem like an immovable rock at first. But once you get some traction to it, it is really very exciting.

  5. First time reader here – found the post via Twitter. I paid off my first mortgage several years ago through a combination of unremitting focus and by treating it as a very real, very active debt.

    Good luck with the challenge! Off to have a nosey around the rest of your blog!

      1. Thank you so much for reading the post and sharing your comment. I am finding that when I talk about my goal people either think it is impossible or, like you, tell me how they did it within a very short period of time. Others try to talk me out of it and say there are better financial strategies. I really appreciate you sharing your own story. From my perspective, there is nothing like home ownership. How did it change your own financial situation?

  6. Well we actually bought another house not long after so we’re now mortgaged up again. What is has done though is give us an underlying security. Yes we still pay out mortgage money every month but we also have loads of equity in our home meaning firstly our present mortgage is still pretty small bit also if things did go downhill we should be able to sell this place and buy somewhere outright. Don’t actually intend on having this mortgage for long though, will be paying this one off asap!

  7. Hello, I am reading your blog from (my native) Germany – we lived in Australia for many years and still have properties there, leased out until we can go back (my mum is ill, so we came here). I came across your blog via Firebug and love it as I share your mindset. Keep going, I have added you to my favourites! 🙂

    1. Thank you for your kind words. I had so much fun doing the Aussie Firebug podcast – it was great. Is it difficult renting out properties when you are not here? (I had properties rented out when I lived in Taiwan and it was fine.)

      1. Thanks for your reply 🙂 It’s mostly okay despite living overseas. We only had to change agents once for one of them, because the agent we were with was pretty lazy and did not show the property for 4 1/2 weeks once the tenant had given notice. Overall no major issues though. We recently bought another property in Germany because real estate is booming here and interest rates are very low (2.35% including paying off the principal) and one can fix them for up to 20 years (!).

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