How to Live Mortgage Free (2024)

If you aren’t sure how to live mortgage free, there are plenty of ways to get started. With a little hard work and some commitment to your goal, you will be surprised how easy it is to create a life without a mortgage.

Just try and picture your life without that pesky bill each month. Sound too good to be true? It isn’t! I wrote out some of my favorite tips and tricks to help almost anyone become mortgage free.

While paying off your mortgage may seem like an overwhelming task, it can be done one step at a time. And once it’s paid off, you will have the most wonderful sense of freedom!

My next goal after my new business is up and running is to pay off my house. I live in SoCal, so this is a pretty big task, but I know it can be done!

Anyone who is dedicated can work to pay off their mortgage and live mortgage free!

Benefits to Paying off a Mortgage Fast

There are so many benefits to living a mortgage free life. For one, you don’t have a giant expense hanging over your head every month.

I know for my own family, living mortgage free means having a few thousand dollars extra each month.

And you only have to make enough money to cover your expenses, without the fear of not making your mortgage hanging over your head. If you follow these frugal living tips, you’ll be golden!

You also have access to the equity in your home if something crazy does happen. You can take out a home equity line of credit for a pretty reasonable rate, or do a cash out refinance to help you through your hard times.

**I don’t recommend doing these unless you have no other option – you’re just right back to having a mortgage again.

What would you do for an extra couple thousand dollars each month? If it sounds amazing, keep reading! It is totally possible to pay off your mortgage with the tips in this article.

How Living Mortgage Free Will Save You Money

Its basic math- living mortgage free will save you SO much money in the long run.

You see, when you are paying for a mortgage, you aren’t just paying for the house, you are also paying interest. Oftentimes, the interest ends up being up to 50% of what the house costs (or more in a lot of cases)- you don’t want that.

Paying off a mortgage as quickly as possible is so important, which is why I wrote some of my favorite tips to help you pay off your own mortgage.

12 Ways to Live Mortgage Free

Start a Budget

Creating a budget to pay off your mortgage is the most important step in this entire process! I know, a budget can sound super scary, but all a budget is, really, is a plan to tell your money where to go.

A lot of people think that having a budget means no fun, but its actually the opposite. Creating a budget will allow you to relax when you are spending money on those fun things, because you know that you can still pay all of the other bills- including your mortgage.

You can for sure live well on less!

Making a budget to pay off your mortgage as quickly as possible is a really, really good decision.

Decide Together to Pay off the House ASAP

Getting on the same page as everyone on your mortgage to pay it off as soon as possible is a really, really good idea. If you both agree, then making decisions like ‘where that work bonus should go’ become a LOT easier.

If you haven’t purchased a house yet, then this decision is even more important. You can choose how much you are willing to spend so that you know how much you can overpay to avoid interest payments.

Let’s say, for example, that you can afford $2000 a month for a mortgage. Instead of buying a home that requires you to pay that amount, try to find a home that has a mortgage that is $1500.

The trick you, you still pay $2000. That extra money will add up quickly and will help you take years off of your mortgage.

Get a Fixer Upper

You would be surprised how rewarding a fixer upper can be! Yes, they are a lot of work, but they can be so much cheaper that oftentimes with a coat of fresh paint and maybe some new countertops, you can make the house of your dreams.

I also think that there is something so rewarding about the hard work that goes into making a house into a home. Sitting in a room that you took from drab to fab can be one of the best feelings in the world.

Some people even do live-in flips to make money. If you live in your house for more than a year, you can sell it for a tax free profit and move on to the next house! If you make enough money doing this, you can just pay cash for your forever home.

Live Rent Free in Exchange for Work

There are people all over the world looking for tenants to help out in exchange for a place to live. Whether you are a nomad looking for a place to live for a few weeks, to a landlord looking for someone to help maintain their grounds for the year, these places actually exist.

If you are willing to put in the work, you can use that time to save up and buy your own home for cash– that means no mortgage!

Buy at the Bottom of Your Budget (or less)

When it comes to being mortgage free, the cheaper you can buy a home, the better. because honestly, a big house a lots of money doesn’t buy happiness.

Think about it this way- just because you can afford the payment of a house that’s $500,000, doesn’t mean that you have to buy at that price point. Once you begin to incorporate the interest, that house is going to get much more expensive, and fast.

Look at some houses that are cheaper so you can pay off that mortgage fast. Our house isn’t necessarily cheap, but we got it for about $50K under market at the time. This is going to help us pay off that mortgage even faster.

Make Bi-Weekly Payments

This is one of my favorite options! Instead of only paying the mortgage once a month, why not get into the habit of paying the mortgage every paycheck?

You can totally set up your paycheck budgeting to make this work!

If you owe $1000 every month (and you can afford it)- why not challenge yourself to pay $800 every paycheck? That way, you are paying an extra $600 every month, which means you are paying an extra $7,200 every year!

That adds up really quickly and makes your dreams of living mortgage free happen so much quicker.

Start a Side Hustle

Starting a side hustle is one of my favorite ways to earn extra money. Think about what you are really, really good at- is there a way that you can monetize it?

If you love writing Instagram captions, for example, why not reach out to a few of your favorite influencers and offer to write for them?

Or maybe you love baking, have you thought about starting a bakery business? There are so many low cost business ideas with a high return- you can do it!

Of course, you can always go the old fashion route and get a weekend job or even a night job. Reach out to the local coffee house and see if they need any help!

The important thing with a side hustle is that you remember to put it towards the goal of living mortgage free. Even an extra $100 a month adds up, which is why I always recommend getting a side gig for people who want to learn how to live mortgage free.

Use Extra Income Wisely

Something that you need to decide is how to use any and all extra income wisely and putting it toward paying off your mortgage. This means any extra work bonuses, money saved with coupons, or anything like that needs to go toward your mortgage payment.

Trust me, once your mortgage is paid off and you are able to use almost your entire paycheck on anything that you want, you will be so grateful.

Buy Used, Save the Difference

The idea of buying used and saving the difference is pretty old fashioned, but it works. If you need some new clothes for work, for example, instead of running to the mall and spending hundreds of dollars, why not look for some used clothes online?

I honestly buy all my clothes used at consignment shops or thrift stores. We buy dishes at Goodwill, and I always check the sale rack at the grocery store.

Think about everything in your home that you need, I guarantee that you can find that item for almost new. Even just talking about what you need with family and friends can help you get exactly what you need.

Find the Best Type of Home Loan for You

Before you take the deep dive into a home loan– do your research! If you are going to be spending hundreds of thousands of dollars, you want to be 100% sure you do it in a way that is best for you and your family.

There are 6 types of home loans, make sure you know your stuff before you choose which one is the best for you. Oftentimes, people will go to a loan officer and choose whichever loan is presented to them.

Don’t let this be you! You never know which ones you qualify for or give you the best rate unless you do the research.

Also, you definitely want to check out these first time home buyer tips!

Refinance your Loan

Essentially, when you refinance your loan, you are reapplying all over again for a new loan. If you already own a home and are looking for better payment options, then this might be the best path for you to live mortgage free.

Right now in 2020/2021, the interest rates are at historical lows and it is a great time to refinance if it makes sense for you.

If you already own your home and are unhappy with the current rates and loan term, this is definitely an option that you will want to look into.

Recast your Loan

If refinancing your loan isn’t for you, another option is for you to recast your loan. Essentially with this option, your interest rates and loan term remain the same but you reduce your monthly mortgage rate to reflect what you now owe.

If you are 10 years into a 30-year mortgage, for example, but have been following the previous tips on this list, you actually owe less. If you choose to recast your loan then what you owe monthly is much less than it was originally.

This is a great hack for anyone looking up how to live mortgage free. I actually love this tip – you’ll need to specifically ask your mortgage officer about it as they don’t typically offer it up.

House Hacking

If you’ve never heard of house hacking, it’s where you buy a house/duplex/triplex/etc. and rent out one of the units/rooms while you live in the other.

If you do it right, you can rent out the other units for as much, if not more than your mortgage, allowing you to live mortgage free.

If you take that money and save it to pay off the mortgage, eventually your tenants will be paying you to live there and you could have financial freedom!

In Summary

When you are beginning to look at how to live mortgage free, it can feel like such a big task. How can you pay off such a big loan quickly?

Luckily, with a little planning and some hard work, paying off your mortgage is completely possible. You have to learn to live below your means!!

Take a few ideas from this list and commit to them. Soon, you will be living mortgage free!

What ideas do you love from this list that you are going to try out so that you can live mortgage free? Tell me in the comments below!