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Pay Off Your Mortgage in 2 Years

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Pay Off Your Mortgage in 2 Years is a television series with 16 hours of prime-time programming on BBC2, broadcast over two years. Eight households are attempting to clear their mortgages through a range of money-saving and money-making strategies.

The BBC's publicity suggested that a large proportion of us identified happiness as freedom from a mortgage. The average mortgage term is longer than most jail sentences. In the series, presenter René Carayol encourages people to batten down the hatches, tighten their belts and live an austere and productive life to maximise their income and pay off their mortgage.

Your home is likely to be the largest purchase that you will ever make, and it is natural to want to own it outright as soon as possible. But there are other good reasons for paying off your mortgage. Most notably, by paying up before the end of the loan period you can save tens of thousands of pounds in interest payments.

In the first TV series we met the eight families after a year of toil and financial discipline. Next autumn, we discover which households, if any, have bought a bit of liberty. Could you tackle your mortgage in the same way? The book accompanying the TV programmes was published to coincide with the broadcasting of the first series.

Subtitled Your Fast Track to Financial Freedom, it is written by Graham Hooper (Moneyextra.com declares an interest Graham Hooper is marketing director of AWD Group plc, our parent company).

Is it really worthwhile trying to pay the mortgage off early? If you borrow £150,000 at an interest rate of 6% over 25 years, you will eventually pay £140,000 in interest charges alone - making your repayments almost double what you borrowed. Imagine what you could do with that money instead!

Being free of mortgage repayments means having more money to spend on the better things in life, or to put into higher yielding investments. Indeed, Getting rid of one home loan could make room for another - perhaps on a cottage in Provence or a villa in Spain.

When it comes to reducing your debt, a little could go a long way. For example, cancelling a satellite TV subscription of £33 a month and putting the money towards your mortgage instead could save you £19,333 over the 25-year lifetime of a £150,000 mortgage.

There are some easy ways to cut costs - stop smoking, reduce your food intake, no alcohol, grow your own vegetables, get rid of the car and use public transport and remove all non-essential spending from your budget. Whether you could cope mentally with living like a monk is another matter! According to one TV critic, Carayol "did no more than introduce those Victorian stalwarts, Messrs Scrimp and Save."

Which is hardly surprising; there is no magic bullet, no "with one bound he was free" answer. What the TV series does highlight is a level of ignorance about mortgages and their associated costs. This is where the book comes in - it offers sound, basic knowledge and advice. It includes jargon-free, no nonsense information about how your mortgage works, taking some quite complicated concepts and explaining them in a way that anyone can understand.

Pay Off Your Mortgage in 2 Years by Graham Hooper, with an introduction by René Carayol, is published by BBC Books, price £14.99 in hardback. It is available online from BBCShop.com at the discounted price of £8.49.

07 March 2006 © Moneyextra.com

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