Young Perth couple paid off $313,000 mortgage in four years

09:41, Jun 15 2017

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Tammy and Rob Pitman of Perth became debt-free homeowners at just 23 and 27 respectively after a concerted effort to pay off their home loan in just under four years.

For most young people, paying off a mortgage is something you aim to do in 20 or 30 years, if you even think about it at all.

But first-home owners Tammy and Rob Pitman of Middle Swan, Perth, Australia, were having none of that. They wanted their A$300,000 (NZ$313,000) mortgage gone as fast as possible.

And they did it – in just four years, at the age of 23 and 27.

REELMARK LEEDERVILLE
The family home in Middle Swan, Perth, that the Pitmans rented out for nearly four years while they earned extra income in Western Australia.

They didn't win Lotto and there were no family hand-outs or inheritance. Their strategy was simple, they told Today Tonight.

REELMARK LEEDERVILLE
The house is light and bright, with polished hardwood floors.

TONIGHT: The Perth couple who paid off their house in four years. No handouts, no lotto win and they still ate avocado on toast. We tell you how at 6:30 on @7perth. . . . #perth #perthnews #home #homebuyers #mortgage #avocado #avocadotoast

A post shared by Today Tonight WA (@todaytonightwa) on Jun 11, 2017 at 7:51pm PDT

They moved to regional WA, where they could earn a little bit more – "but not mining wages" – and rented their property out. They made double the required payment every fortnight. And they never touched a credit card.

When they did "splash out" on smashed avocado on toast, they made it themselves.

The early pay-off meant they paid just $7000 in interest altogether on their $365,000 home, which they bought with a 20 per cent deposit.

Tammy Pitman says she didn't like the idea of giving her money away to other people "and I include the bank in that". "We could have bought a home that was probably double the price but we decided not to because what we didn't want to do was pay the bank for the next 30 years all the interest."

The couple say they lived with extreme restraint to get the mortgage paid off within four years. They took simple holiday and cooked simple meals.

REELMARK LEEDERVILLE
The couple say they could have spent double the money with a bigger mortgage, but they didn't want to do that.

"I think it is the small sacrifices that actually can make the biggest difference when it comes to saving money and paying off a house," says Tammy Pitman.

They also say it was only bearable because they knew it was temporary. "The way we saved wasn't realistic for us to live the rest of our life," says Rob Pitman. "It wouldn't have happened. We would have burned out. But we were able to give it a hit for a very short time."

Mortgage experts say there are several ways to pay a mortgage off quicker, even if you are not able to increase your income as this couple did.

Financial research company Canstar Blue says simple changes can lead to huge savings, starting with buying within your means and getting the best interest rate available. The company suggests the following tips:

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Today Tonight filmed the Pitmans outside their house, which is now completely paid off.

1. Increase your repayments, which will save thousands of dollars in interest and have your mortgage paid earlier.

2. Use an offset account that is linked to your account. Salaries and all income goes into the offset account, which means your home loan interest is calculated on a lesser figure.

3. Increase the frequency of your repayments. Instead of 12 monthly repayments, make it 26 fortnightly repayments, which means you pay an extra month's mortgage repayment in the year.

As this couple proved, the end result can be life changing.

Stuff