Mortgage-Free By 30 – Here’s How

Mortgage-Free by 30

After making his first foray into the housing market four years ago, MoneyWise writer Sean Cooper set out on a journey to pay off his mortgage by the age of 30. In September 2015, he achieved his goal and kissed his mortgage goodbye. Here is his story:

In August 2012 I bought my first house – a beautifully renovated three-bedroom bungalow with a basement apartment. I was thrilled to have finally become a homeowner, having spent two years searching for a detached house in Toronto, Canada’s second-priciest housing market at that time. It cost me $425,000 and I made a sizeable down payment of $170,000. That left me with with a $255,000 mortgage – an amount I’m proud to say I paid off in full as of September 22, 2015! You read that right – I paid my mortgage down to zero in just over three years, all before turning the ripe old age of 31!

Reaching My Mortgage Goal

It’s been a long journey to mortgage freedom. Two summers ago, I set the ambitious goal of paying off my mortgage by age 31 (I had originally aimed to pay it off before Star Wars: the Force Awakens opened in theatres last Christmas) and I managed to do so, three months ahead of schedule! To celebrate, I threw a mortgage burning party to thank my friends for their support.

So, how did I do it as a single, first-time homeowner? It definitely wasn’t easy. I experienced my fair share of bumps and bruises along the way. Finding a home in my price range took time – and two failed offers. And, despite my house passing the home inspection with flying colours, I ended up spending $25,000 in home renovations in 2014. But I met each challenge head on. So here are a few of my tips for paying your mortgage down faster.

Tip 1: Live Frugally

Homeowners face a tough decision: do you want to continue to live the good life or do you want to pay down your mortgage sooner? There are many ways to live frugally: pack your lunch, walk/cycle/take public transit, cook meals at home, and shop at discount supermarkets, just to name a few. Together all of these strategies can save you a lot of money that can be put towards paying off your home.

Also read: How I Spend Only $100 a Month On Groceries>

Tip 2: Get a Second Job

While living frugally can save you money, it won’t pay down your mortgage alone. If you’re looking to reach mortgage freedom sooner, you’ll need to look for secondary sources of income. The simplest way to earn more money is to get a second job. I worked part-time at a supermarket for over 10 years on top of my regular nine-to-five. You don’t have to work in retail like me – there’s freelance work that typically pays a lot better (you can also do it on your own schedule).

Tip 3: Become a Landlord

In addition to being a first-time homeowner, I’m also a landlord. Rental income is a great way to earn extra income. I was inspired by Scott McGillivray of HGTV’s Income Property to live in the basement and rent out the main floor. This helped me bring in a lot more income and pay off my mortgage sooner. Just be warned that being a landlord isn’t easy. I’ve dealt with everything from bounced rent cheques to damage to my house.

Before you buy a rental property, make sure you’re cut out to be a landlord – check out my tips here.

What I Plan To Do Now That My House is Paid Off

Now that my house is paid off, I have let loose a bit and I’m enjoying the things I had deprived myself of. Now, it’s important to begin travelling. Places on my bucket list include Vancouver, New York, Chicago and Europe.

Instead of working 80 hours a week like I used to, I have been having a lot more fun. I’m going out a lot more with friends to restaurants and events around the city. I’m also getting involved with new activities, including signing up for improv classes at Toronto’s Second City and taking hip hop dance lessons. Lastly, I’d like to find the right woman and get married.

Also read: The Final Mortgage Payment – What You Need to Know>

How I’m Changing My Financial Strategy

Since 90 per cent of my net worth is tied up in my house, I plan to better diversify by investing in mutual funds. I’m working on maxing out my RRSP and I’ve been catching up on my TFSA contributions, as those had been on the backburner since I’d been so focused on paying down my mortgage.

Was Paying Down My Mortgage Early the Right Decision?

Since I reached mortgage freedom one year ago, I have had mixed emotions. While I’m happy to have paid everything off, I made a lot of sacrifices along the way – the biggest of which was my time. I was so focused on paying down my mortgage early that I neglected my social life and I missed out on my 20’s. I’ve been working very hard to change that. My goal is to expand my social circle and make more friends.

If I could do it over again, would I pay down my mortgage so quickly? I’m not sure. If taking three additional years to pay down my mortgage meant enjoying life more, having more friends, and getting married, I think I’d rather take more time. The lesson is while it’s good to focus on work, it’s important to achieve a healthy work-life balance. You won’t be young forever, so enjoy your youth while you still have it.

Are you a first-time buyer looking to pay off your mortgage quickly, or would you rather relax and take your time? Check out RateSupermarket.ca’s best fixed and variable mortgage rates today!

Related Topics

Buying A Home / First Time Home Buyers / Home Ownership / Mortgage News / Mortgages

12 thoughts on “Mortgage-Free By 30 – Here’s How

  1. Congrats on paying it off so quickly, that is great. I’m torn on the subject though because paying off debt relieves a lot of stress and allows a lot of freedom, but it may not be the most financially beneficial decision. For example, interest rates are at their lowest in years so borrowing costs on that money would have been minimal, add to that the fact that if you are renting out a portion of your home that portion now becomes a tax right off as well as the interest on your loan for that portion is tax deductable, so in actuality when you figure in both you are only paying about 1-2% at most on that money. No when looking at market performance over the last 3 years that $200+K would have easily made a modest 6-8% (a lot of funds and diversified portfolios have made >10% and even 15% in the last 3 years of an up market), so when looking at it that way you would be further ahead investing the extra money and earning a higher rate than what you are paying off. But again, sometimes you can’t put a price on peace of mind.

  2. Sean, congrats on this significant accomplishment. Your insights around how valuable time is over money is resonating with me. For those of us over 50 still working hard with no mortgages and money in the bank you give us something to think about. Our early retirement gives employment opportunities to young people like you and allows time for us to enjoy life while we’re still active. I’m in the process of making an early retirement decision and reading your post is helping me to move in that direction.

  3. Sean’s story sounds very similar to ours. For us, I believe it was worth the short term sacrifice to be mortgage free at such an early age .
    Sean mentions in his blog that he is now interested in investing in Mutual Funds. I’m sure that Sean is aware that the majority of the Mutual Funds out there charge an average of 2.5% in yearly fees versus the much cheaper ETF’s.
    When we finally made the switch to EFT’s our fees dropped from 2.58% to 0.20% yearly.
    Why pay yearly fees of over $10,000 on a $400,000 portfolio of Mutual Funds when you can easily construct a diversified balanced portfolio using ETF’s and pay just $800 a year.
    Congrats to Sean on becoming mortgage free.

  4. Hi Sean,
    Congratulations! You are living my dream of being mortgage free. I still have a ways to go but pacing myself – enjoy!
    Anita

  5. What line of work is Sean in and what are Sean’s yearly earning to pay off a $255,000 mortgage from what age to age 31? How did Sean manage to come up with a $170,000 down payment? What part of Toronto did Sean find a 3 bedroom bungalow for $425K?

    • I’d have to agree here. As significant as this is, how Sean saved 170k in his 20s working a 9-5 job is a bit shocking to me. Were you living at home with no expenses? Did your parents assist? If so this may have been feasible but I feel this has to be defined because most mid 20 year olds can only afford the 5%

      Also 425k in Toronto? Not a condo? Where?

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