Couple in their 30s pays off £95k mortgage 28 years early with smart budgeting


A married couple in their thirties have revealed how they paid off their £95,000 mortgage 28 years earlier.

Siobhan and Lee Bowen bought their first home together in 2011, and after clever budgeting, they now own their three-bedroom semi-detached house.

The married couple, from Great Wyrley, Staffordshire, cautiously overpaid and sacrificed the latest gadgets so they could say goodbye to their mortgage.

They also used the advice they learned from listening to money-saving podcasts.

Mother of one, Siobhan, 36, and husband Lee, 38, took on the challenge of paying off their debts before Siobhan reached 40, but they met the already ambitious goal ahead of schedule.

The super-smart savers have been enjoying a mortgage-free lifestyle ever since and say the freedom it has created is priceless.

“In college, we struggled to earn enough to cover the bills and keep our heads above water. We realized how easy it was to get into financial difficulties,” Siobhan said.

“We became disciplined and saved regularly when we had a full-time job.”

The couple saved a £35,000 down payment over six years and after getting married in 2010, they bought their house the following year for £112,500.

They made a 15 per cent deposit of £16,880 to get a better mortgage rate and withheld some for renovation work on the property.

Siobhan said: “It was good value as a typical house in our area cost around £150k. We negotiated because it had been for sale for a while.

“We could have borrowed up to £190,000, but we chose not to get the most out of ourselves. We wanted to make sure our mortgage payments and essential bills would be affordable on one paycheck.”

“It was very important for us to have a mortgage with unlimited overpayments,” she added.

The couple, who had a family income of around £40,000, were denied a 25-year mortgage, so signed a 35-year term. From £394 per month they started paying an extra £160 per month.

The Bowen family home

Explaining their budgets, Siobhan says they made “wise choices” and instead of going out regularly, they invited friends and family over for home-cooked meals.

“We didn’t have high-paying jobs,” she says.

“We have found a good balance. We couldn’t live without it, but we weren’t trying to keep up with the Jones’s either.

“Lee drove a 12 year old Volvo that had done 200,000 miles on a petrol engine, it never broke down.

“We were still on holiday and even checked off a few places on the bucket list, such as New York, Croatia and Lake Garda – we always found the best deal for our money.

“Instead of sacrificing a happy lifestyle, I think the most important thing we did was make a series of wise choices on purpose. We educated ourselves with the help of Martin Lewis and Pete Matthew from The Meaningful Money Podcast.”

“We never had a car to finance and I couldn’t justify spending £45 a month on a mobile phone.”

In 2012, the couple welcomed their son, Caelan, and Siobhan dropped to a basic maternity salary.

Two years after the purchase, they took out a new mortgage for £89,210 – but thanks to do-it-yourself renovations, their home was valued at £145,000 and the loan-to-value ratio was reduced to 60 per cent, giving them access to the best deals.

They continued to overpay on their five-year fixed rate and requested a recalculation in 2016.

The standard payment was further reduced and with Lee’s pay increase, the couple added more to their overpayments and were one step closer to their debt-free goal.

Their savings built up and in 2017 they made an overpayment of £20,000, another £10,000 in May 2018 and another £12,000 in April 2018.

In September 2018, they owed just £20,480 with 28 years remaining and their standard repayment was just £89 a month.

However, in October of that year, Siobhan lost her job and the couple had to end their overpayments.

When she returned to work, they stopped paying too much, set up a savings account and eventually had enough to pay off the remaining £18,838 in one go in March 2019 – just seven years after buying their home.

Siobhan said: “Over seven years we have repaid a total of £112,924.57, saving us £57,288.71 over the expected term of the mortgage.

“We are proud, no inheritance or secret lottery was won. We succeeded through hard work and savings.”

Siobhan’s tips

She said: “Use a calculator for overpayments, even small overpayments can yield big savings over the life of the mortgage”.

“The more you can overpay in the beginning, the better it will be in the long run because the interest rate is much higher at the start of the mortgage”.

“Consistently overpaying every month because lump sums may be harder to separate”.

“Don’t go out too much on the first purchase. Just because you can borrow more, doesn’t mean you have to make sure it’s affordable, even if your circumstances change.”

“Balance is key, don’t deprive yourself too much, otherwise you won’t last. Little and often is better.”

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The self-made money guru added: “Ask for a revaluation if you’ve done extensive renovations or if the market has increased the value of your home, it will lower your LTV ratio so you can get a better deal.” .”

“Be warned, it can become addictive once you realize how much money can be saved, but being debt free has given us security, freedom and peace of mind.”

Siobhan, who now works as a paraplanner for an independent financial consulting firm, added, “I think saving money is my calling.”

“Our next challenge is to retire early.”

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