How I became mortgage free at 34

From a 1970’s two-bedder south of Sydney to an enviable family pad in Coffs Harbour, Cath Fowler’s smart property choices have left her mortgage-free at 34. Here’s how she did it.
Cath Fowler

Last month, my husband and I picked up the keys to our family home. It was such an amazing feeling walking through the doors knowing the place was all ours – not the bank’s. We had finally achieved our goal.

While owning our home outright was never in my short-term plan, it was something I thought would happen eventually. My more immediate focus was on building a portfolio of properties to provide a future income stream. My husband had little superannuation, so we needed other assets that could help fund our retirement.

The 2-bedder in Sydney

The 2-bedder in Sydney

Our first property purchase was a 1970s two-bedroom unit, south of Sydney, purchased for $353,000. With its yellow benchtop and dated bathroom, it was nothing flash. But we didn’t mind, as it was just the start for us. We had been saving the deposit for 18 months prior while I was on a graduate-level wage and my husband worked part time as a chef.

When the time came to find a lender, we had our work cut out for us. My husband’s casual income was not taken into account and I was on a small wage. After being turned away from our usual bank, we found a mutual bank that offered a 40-year loan term. This was the only way we were able to secure funding.

We could have given up when we first got turned down, but we knew from how aggressively we had saved that the loan was well within our means to pay back.

As it turns out, I moved on to better paying roles over the next couple of years and my husband changed careers to become a carpenter.

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Growing our portfolio

Growing our portfolio

From 2011 to 2013, we added an investment property to our portfolio each year. A small one-bedroom fibro house down the South Coast of NSW for $160,000 was not a pretty place, but the sums worked to make it a good investment. The holding cost was around $50 a month for us before tax breaks.

In 2012, we used a buyer’s agent to purchase a three-bedroom house in Sydney’s Blacktown for $389,000. With my husband’s carpentry skills, we added a granny flat making it a dual-income property. This meant that from day one the property was cash-flow positive.

Growing our portfolio
Growing our portfolio

We purchased a four-bedroom home for $720,000 the following year. It was already set up as two separate dwellings, so we lived upstairs and rented out the bottom. This helped us pay off a portion of the mortgage.

Growing our portfolio

Rather than selling our original unit to help fund this purchase, we turned it into an investment property and used the equity in our other properties to fund the new house.

We were far from the wealthy property speculators you might imagine. We were simply a young, newly married couple on fairly modest wages who saw the benefits of investing early on.

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Starting a family changed everything

By this point, all our investment properties were cash flow neutral, bar the one we lived in. This was important for us as we wanted to start a family and knew we couldn’t rely on our incomes to prop up our investments.

It was not until we had our two daughters that we realised how hard we were working just to pay off the mortgage on our $720,000 home. We sat down to work out how much of our income was needed to keep the place and came to the realisation that spending more time with our girls was a greater priority for us.

We did the math and worked out that if we sold our south coast property and our principal place of residence, we would have enough cash in the bank to purchase a home mortgage-free.

In order to do this, however, we needed to leave Sydney. We decided to move to the regional NSW city of Coffs Harbour – where my husband grew up.

Work opportunities are harder to come by up here, but with our new-found mortgage-free status and a lower cost of living, we now have far less pressure to earn a high wage.

By choosing to make sacrifices and go without certain luxuries in our earlier years of marriage, we can now enjoy the choices those decisions afforded us.

We’ve found the happy balance between owning our own home and still keeping a foothold in the Sydney market with our two remaining investments.

My 5 top tips for building your portfolio:

  • Take the time to explore your finance options. We have always used a mortgage broker and found this invaluable in helping us structure our loans and grow our portfolio quite quickly.
  • Get the right team on board. Besides the right broker, we had a great financial planner. They are a successful property investor themselves, so that was important for us as they understood what our goals were. Using a buyer’s agent for one of our purchases was also one of the best decisions we made.
  • Leave emotion out of it. The places we bought were quite average and didn’t always look aesthetically pleasing, but they still made for great investments.
  • Explore your options with dual income properties. This was the key to success for us in being able to service our loans on modest wages.
  • Learn as much as you can from experts. Back when I first became interested in property, I read every book and magazine I could find on the topic. I became a member of a property investing online forum and absorbed as much information as I could – so I understood what I was investing in.

What to do next:

  • Chat to a uno. expert to find out how you could start an investment portfolio;
  • Calculate how much you need to borrow to buy a home.
Cath Fowler
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