Mortgage-free or a month-long holiday? Which would you choose?

Sydneysiders Sally and James* recently found themselves in a pretty exciting situation. Through a significant amount of hard work and effort, they received a work bonus which was enough to pay off the mortgage they’d been slowly paying down. A decision had to be made. Should they give in to their desire to travel – or free themselves from debt and join the 31% of Australians currently living mortgage-free? “With three teenagers at school, all the life expenses that we incur, and a wanderlust for travelling whenever budgets would stretch that far, it was tempting for a brief moment to do something ‘fun’ and family-oriented with the bonus,” Sally admits. “We were certainly tempted to splurge but we knew the right thing to do was pay down the mortgage.” Sensibility prevailed. “It’s a no-brainer – pay down the debt, then build on your retirement nest egg by saving your mortgage repayments,” says Sally. “ You don’t want to look back in 10 years wondering ‘what if?’” As far as financial problems go, this is one we all aspire to: when a large – and unexpected – cash bonus comes our way. How much can I save by refinancing?Use UNO's calculator to estimate your savings. Calculate Savings

Long term gain or short-term joy?

Whether it be through an inheritance, surprising win or pure hard work, imagine suddenly being faced with the most delicious of financial decisions: do we spend this windfall wisely or cast aside all sensibilities and splurge like there’s no tomorrow? No matter how tempting it might be to book an all expenses paid, first class holiday around the world or drive out of a dealership with the car of your dreams, there’s simply no escaping the fact being sensible will deliver long term gain instead of short term joy. Even if you can pay just a little extra each month, it can shave years off your mortgage. For example, just $100 extra a month – or roughly $3 a day – will save you more than $40,000 and cut two years off your loan term.

Read: The three must-have mortgage features to get you out of debt fast

Find a dealAnd while being freed from monthly mortgage repayments doesn’t sound as glamorous as spending a year visiting every continent on the planet, there are still some very real, tangible benefits to be enjoyed. “A mortgage-free house was almost as appealing as a month travelling throughout Europe for our family,” Sally admits, adding it came with its own feeling of liberation. “Our debt-free house has also become our retirement nest egg, and that has given us a great sense of relief that we have partially prepared ourselves and our boys for when we retire. “We also feel fortunate we no longer have to worry about how to manage mortgage repayments if we no longer have a regular income coming in. You never know what’s coming at you around the corner.” The couple also liked the idea of having a clean ‘savings slate’. “All our savings now don’t need to go into our debt or paying interest on our mortgage.”

Never fear – there’s still room for fun!

Without fortnightly mortgage repayments to worry about, Sally and James feel more able and willing to treat their family. “We’d be lying if I said we didn’t treat ourselves to a nice bottle of French champagne to celebrate,” Sally says, but adds: “A fancy car or dream holiday won’t support you and your family in the future, but a debt-free property will. Do the right thing – but don’t forget to save a little for a treat to reward yourselves for doing this.” Get started*Not their real names. If you came into an unexpected wad of cash, would you make the same choice as Sally and James? Leave your comments below.Book a call in with UNO

Book Call Now

Book Call Now

UNO home loans

Need help with your home loan?

UNO Brokers are available night and day for a quick review or your situation and bring expertise that will support better decision making that will save you time and money. Book in a quick call when it suits your busy schedule

Get Started

Related Articles

TESTIMONIALS

What our customers are saying

Rosie Deiath
July 2, 2024
Karis from UNO was so supportive throughout the entire process of buying our first home. She was contactable at any time, and answered all our silly questions for us. We couldn't recommend Karis and her team enough, as it always felt like she was in our corner with our best interests at heart.
Read more
Jack Mikkelsen
July 2, 2024
We dealt with Karis Churchill as the mortgage broker for our first home. Karis was so supportive and knowledgeable through the whole process! A+ mortgage broker. Definitely utilise her expertise if you’re buying a house!
Read more
Kapil Baldota
June 25, 2024
Eren Tan is absolutely one of the best mortgage brokers in Melbourne! Keeping us well informed throughout the process. Eren gave us a helpful hand in managing to get our loan over the line in a quick and efficient way which is what we wanted and he delivered on that. Thank you Eren Tan!
Read more
A M
June 21, 2024
I only have praise from my Uno experience! I was a broker sceptic, having done all of the hard work myself for my first two property purchases and sale. I'm now a proud broker advocate having used UNO (Karis Churchill) for two refinances and purchase. The value add Karis brought cannot be underrated! Not only has Karis got me the best rate, with a bonus cash back (nearly unheard of in this climate), she has done it with the least back-a-forth and with the least administrative burden on me (the thing that can deters people from refinancing to begin with). Karis is always on top of everything. Karis knows her stuff. She is the most responsive of any professional service provider I've ever used (my banker never text with an update at 7pm on a Sunday) without being overbearing. You know she's got your back and in my experience the value speaks for itself. Thank you to the whole UNO team, thank you especially to Karis.
Read more
Leanda Cawdry
June 8, 2024
Very pleased with the outcome of this process, Michael Parsons and his team at UNO were helpful, communicative, and took all the stress out of the process of finding me a refinance deal that met my needs. Would definitely recommend Michael and UNO, and I already have!
Read more
Glen Matthews
May 29, 2024
Regarding UNO Home Loan services. I had great experience with uno home loans, Michael parsons was my broker for UNO Home Loans we had excellent communication throughout the whole home loan application. If I had any questions on home loan application which were many were answered in great detail. He had the time to assist me in filling out endless application forms at anytime through the day or night which made the application process stress free. So I would strongly recommend Michael parsons from UNO Home Loans to try his services you will not be disappointed. Thanks to Michael parsons I have the lowest home loan interest rate I could ever hope for which I particularly ask for. It’s was a pleasure working with him. And will be using his services in the near future.
Read more
Gillian Anderson
May 28, 2024
Thank you to Michael and UNO for their help in securing our home loan. I like the way they break everything down in simple terms to ensure that you can make the right decision. Michael was polite and very patient to help us get things across the line. We are now sitting in our first home away from rental circus. Can't recommend them enough. Thanks Michael and thanks UNO
Read more
Andy Song
May 17, 2024
Amy has been absolutely wonderful as a broker. I would not hesitate one bit in recommending her services.
Read more
Troy H
May 13, 2024
Scott Wilkinson did a great job as my broker. He was very patient and always happy to answer my numerous questions throughout the considerable period of time that it took to secure a suitable property. Would certainly recommend Scott and the team at UNO for anyone seeking a broker.
Read more
Elvin Singh
May 10, 2024
First time I have used a Broker and I must say Andrew Wyers and his team were amazing to work with and handled my refinance from a Big4 bank. He was able to understand my needs and find a lender that will be able to help me grow my investment portfolio. Andrew and his team kept me updated as part of my refinance journey and made the process super easy and I was able to refi to new lender in under 2 weeks. Would highly recommend Andrew.
Read more
Nadine Steffens
April 19, 2024
Scott and the team at Uno are absolutely 💯 amazing. I don't think I could have done my loan on my own. They are highly motivated and I do recommend them.
Read more
Andrew
April 16, 2024
Dealing with Scott Wilkinson was an absolute delight. Scott is tenacious, hard working and readily available. He made a very stressful process for me and my partner smooth sailing. Would highly recommend.
Read more