Mortgage Free Diaries - Hannah who became mortgage free by 32!!!
Our guest today is a total rockstar! She's living proof that sometimes our dreams just need a little tweak to become even more incredible. Instead of lusting after the "perfect" dream home, she shifted her focus to freedom and flexibility by becoming mortgage-free at the age of 32. How did she do it, you ask? Keep on scrolling to find out!
Location: North West, United Kingdom
Occupation: Education Officer
Mortgage Free age: 32
Time taken to pay off mortgage: I’ve had a mortgage from 22, so ten years but at 25 I moved house to live with my partner, in his house, so we ended up with a house each for a while. We sold both and pooled assets to buy our most recent home. This particular mortgage was for £20k as we had built good capital in both homes via renovations.
Mortgage/Cost of home paid off: At the point of purchase the house was £200k (that’s around $413k in NZD at time of posting). The mortgage was a specialist type of mortgage to help cover the renovation costs it needed.
Natural spender / saver or investor: Saver and I’ve recently started investing too.
Where did your inspiration of becoming mortgage free come from? It was sheer accident. When we went to try buy a home together in late 2020 we looked at houses whereby we’d be borrowing closer to £130k but each time they fell though due to breaks in chains or bad surveys. So we sat down and thought carefully about what we wanted, we started to look at cheaper houses that needed work and instead of being the ‘dream’ home, it would be a happy and comfortable home. As it turns out our dream then became mortgage freedom and the life perks that it comes with.
What was your main motivation for becoming mortgage free? £20k wasn’t a huge mortgage to need, it felt really doable to work hard and get rid of it fast to save on interest. We overpaid by £400 per month ($830nzd) on top of our regular £400 payment to shift it.
What was your biggest challenge during your journey and how did you overcome this? It was just keeping going, we really did pool all our money into ensuring we didn’t need to borrow much. It meant we weren’t really saving and we couldn’t buy ‘nice things’ for the house at the time. We have been here two and a half years now and still don’t have light shades upstairs.
What lifestyle has being mortgage free early given you? It has led to a form of semi-retirement for me at 32. I’m not drawing money down from anywhere but my wage from 21 hours work a week covers my bills, spending and saving now that the mortgage is gone. I love having four day weekends every week, it’s changed my life in many ways.
How do you feel about getting another mortgage? I’d rather not but I do think life happens and I can’t control the future.
What kind of conversations did you have about money growing up? Do you remember being taught about money by your parents? Money wasn’t openly talked about but we were a poorer household, you just knew as a kid you were poorer than friends. We didn’t have much but we were happy. My parents did talk about saving and built good habits for not spending frivolously on items you don’t need and I’ve carried this frugality with me all my life.
Did you/do you feel comfortable discussing your mortgage free journey/becoming mortgage free with friends and family? Did you receive any unexpected responses? I didn’t tell anyone, my friends still don’t know. My family do now know and the unexpected response was ‘aren’t you lucky’ – I’m not lucky, I worked really hard for it. It was years of cutting back to make sure we got the home owned outright. It was planning and dedication, not luck.
What was a non-negotiable cost that you did not give up during your mortgage free journey? This is tough, apart from the basics we didn’t have any other big costs to cut really. I kept my music subscription and my partner his gym membership. We also did have a weekend away together during this time but didn’t go on bigger holidays. We are now getting back to have longer and abroad holidays.
Do you feel different about money since becoming mortgage free? My mindset has changed, I’m so much more conscious now with my money, it’s not a passive tool to live from but something I keenly consider and wish to grow. It led to me reading more about a movement called Financial Independence Retire Early and that has led me to start investing too. I have always been good with money but now I’m trying to be more educated on the topic.
Did you invest outside of government retirement schemes whilst paying down your mortgage? I continued to pay into my workplace pension and I did started investing too, not a huge amount but dipped my toe. I now regularly invest each month. I wanted to work out how to grown my money passively so that eventually I can cut work down even more, from 3 days to 2 days, but that’ll be a while away.
Do you have joint or separate finances? How important do you think this is? We have separate finances BUT we consistently discuss money and that’s the key. As indicated from my first answers our lives came together as a mesh and so we set up a joint account and each pay a proportion into that for family bills but otherwise we have our own money. I find that instead of it just getting lumped into one pot and spent mindlessly we both need to have a handle on the household budget to contribute to it, it shares the mental load of family finances and it works for us.
“Instead of being the ‘dream’ home, it would be a happy and comfortable home. As it turns out our dream then became mortgage freedom and the life perks that it comes with. ”
What is the best money advice someone has ever given to you? 50/30/20 rule. It’s such a great place to start with a budget, especially as a young person starting out in life. 50% of your incomes on needs, 30% on wants and 20% on savings. I have a slightly different formula now of 40% needs, 25% wants and 35% saves.
What are your top 3 tips for becoming mortgage free? Speak to your bank/broker to understand how much to can overpay, set up a plan of how much you’ll overpay and, finally, stay dedicated.
What top tips do you have for others who want to become mortgage free but feel like it is impossible to do this with children? It is really tough out there, especially now, in the UK we have some of the highest childcare costs in the world I believe. I’m not so sure how feasible it is whilst children are in nursery. Nursery fees alone can run into thousands. The two years we paid our mortgage down aggressively my children had started primary school. Plus I do only have the one child so there is lesser of a cost there. It is still doable whilst having dependants, we’re living proof, but I do understand how it feels harder.
Be sure to follow Hannah on Instagram for more money motivation and inspiration, deets below:
My social media account is Instagram @managingmymoney, please follow along for more person finance and mortgage freedom content. You can also search the hashtag #mortgagefreeby33, which was the goal, to see my journey.
Let's wrap up by sending a massive shoutout to Hannah for taking the time to share her awe-inspiring mortgage-free journey with us. Thanks, Hannah!
Friendly reminder: the above is all about personal preferences and thoughts. Soak up the fun, get inspired but remember, it's only for entertainment and educational purposes. This is not financial advice!
