Fifteen years ago, while working as an editor at The Australian Financial Review, I was given an assignment that changed my life: delve deep into the facts, traps and maths of mortgage debt, to determine if there were ways to more quickly and, crucially, cheaply pay one down. Fast forward seven years from that painstaking process and I'm delighted to say we'd done it. My husband and I had used all the debt-busting techniques I'd identified to get mortgage-free.
I am going to happily share with you the exact techniques we used - there were more than half a dozen that worked for us in canny combination - so if some or all work for you too, you can replicate them.
But we don't usually talk about such things, do we? It's quite taboo to disclose you've paid off your home loan and yes, it is uncomfortable for me as well ... you might have clocked that it's taken me a good while to work up to it. And many of the wonderful families who have agreed to also reveal their most intimate debt-beating details in my book didn't want their identities revealed. But universally, they hoped their success stories would provide inspiration for others.
The thing is that amid a credit squeeze and shakier financial times, I believe it's necessary to change the conversation from how much it looks like we own to how little we owe. Not how huge the house, but how diminutive the debt. Getting into debt for whatever shiny thing, is unremarkable; it's getting out of debt that should be celebrated.
Imagine being able to say to your friends at this weekend's barbecue: "Guess what, we only have 50 per cent left to pay off our home loan as of this week." Then getting whole-heartedly congratulated!
People need to be prouder of getting rid of their debt than they are of the value of their property.
And once you start the cost-cutting conversation - one you might assume could get awkward - even the most unexpected people could prove enthusiastic and empathetic. To quote one gorgeous gal-pal who I didn't realise was on a hard-core mortgage-reduction mission: "Oh my gosh, I thought of a funny one I do, for your [a word I've shamelessly made up] stinge-spiration. But you won't print my name, right?"
People need to be prouder of getting rid of their debt than they are of the value of their property. And once you start the cost-cutting conversation ... even the most unexpected people could prove enthusiastic and empathetic.
Full disclosure: some of the more questionable savings ideas in my book did come from my friends ... and gave us plenty of laughs. But if you want debt freedom badly enough, maybe you'll follow them. I've applied no filter because how far you're prepared to go for mortgage freedom will depend on your personal and private priorities. No judgment here!
Your very first step is to: "Name your date". Even the best of us need strong motivation to resist instant gratification. In other words, a water-at-the-mouth reason to stash - not splash - the cash.
Getting specific about what, where and when you want to call it home - entirely - crystallises your saving/repaying purpose.
So when do you want to be fully free? To have options and autonomy and a more relaxed life? Is it by retirement? A milestone birthday? Are you giving yourself five years?
Pinpointing an exact moment in mortgage-free time makes you so much more incentivised to own not owe ... you see just how much money that means you'll get to save - in other words, keep for yourself! I knew that, for us, ditching debt in seven years meant saving more than $200,000. Talk about a rocket. And what I call today's interest epiphany will strengthen your resolve even further. It's: record low interest rates mean a massive opportunity to get mortgage free faster and cheaper than ever before.
At the turn of the last decade, when rates were at 8 per cent, the average $400,000 mortgage cost nearly $930,000 to repay. Yep more than double what you borrowed.
But 15 official rate cuts later, even if you're on a non-competitive big bank comparison rate currently near 5 per cent, that same home will end up costing just $702,000.
That's if you take the 25 (or 30) years your lender wants you to take to repay it, though. Say you instead get clever in your quest to become mortgage-free, as well as find all sorts of extra money with which to do it ... because you apply all my win-spiration (yet another word I've invented).
Say you consequently end up ditching your debt in just 10 years. That average house will go from costing $702,000 with interest to only $509,000. And a more-than $200,000 saving is something to talk about.
This is an edited extract of Nicole Pedersen-McKinnon's new book How to Get Mortgage-Free Like Me, available from NicolesSmartMoney.com