Canberra mum's new book on how to pay off your mortgage in 10 years

New research from Roy Morgan in June found an estimated 1.43 million mortgage holders were at risk of mortgage stress, meaning they were paying between 25 to 45 per cent of their after-tax income on their home loan.

When homeowners are already stretched to the limit, how can they be asked to throw even more money at their mortgage?

Serina Bird says it can be done. And the sooner the better.

The Canberra public servant, author and mum of two has been well ahead of the curve of these belt-tightening times, giving money-saving tips for years as The Joyful Frugalista, arguing you can be frugal but still have fun.

Now, with the Reserve Bank increasing the cash rate 12 times in just over a year, more than 1.3 million fixed-rate mortgages due to end either this year or next, and the cost of everything from groceries to petrol increasing, Bird's latest book, How To Pay Your Mortgage Off in 10 Years (Even When Interest Rates Are Going Up) might seem like either a saviour or slap in the face.

Bird, a mix of light-heartedness and steely attention to detail, says she more than understands people are struggling at the moment and maintains the book is here to help, not hinder.

"I really didn't want to write something that was preachy or judgmental or to tell people 'just to suck it up'," she says.

"It is very difficult for a lot of people right now."

Bird says her book is not intended to "make you feel bad for enjoying your life" and argues even taking small steps will pay off in the future.

The average Australian mortgage is $601,797 over 30 years, according to ABS figures from November 2022. Bird says over 30 years, a mortgage holder is spending $695,029 in interest payments for a $600,000 loan.

By contrast, she writes, if you increase payments to repay the loan in 10 years, you would pay $199,348 in interest - a saving of $495,681. It doesn't have to start big. Pay fortnightly, and you can shave five years off your loan. Saving $150 a week on the grocery bill and putting it on the mortgage could take off 10 years and more than $250,000 in interest. Stop sending $40 a week on takeaways and that's two years off the mortgage and $60,000 saved in interest. It won't be easy but it can be done. Just start, Bird says.

"It's kind of like where I live in Turner, there's lots and lots of new buildings going up, there's always new apartment buildings, and you walk past for years and they always just seem to be digging, digging, digging and nothing really happens and then, all of a sudden, you blink and it's gone up overnight," she says.

"And that's kind of how your mortgage works. You don't see the value of those early additional repayments, but they really do make a difference. And particularly for young people starting out, if they can be frugal for a while and really focus on it."

Bird says she wasn't looking to write another book but agreed when approached by Melbourne-based business book publishers Major Street who could see it was something that could resonate. The book did hit a chord, immediately becoming Amazon's No.1 best seller in the financial interest category. It includes everything from explaining the wonder of compound interest to how to cut down on takeaway food to how to save on insurance.

And Bird puts her money where her mouth is. She rented out a spare room to speed up the payment of the mortgage on her current home. She regularly enforces $100 weekly grocery shops, forcing her to look in the cupboard and freezer and use what she already has.

Bird says she and her husband Neil are now mortgage-free. They live with her two sons in a three-bedroom apartment in Turner. They have no car loan. They pay off their credit cards in full each month. And they both have good superannuation.

They have three investment properties. Two of those were from her first marriage when she and her then husband managed to accumulate 10 investment properties over nine years.

How can someone living pay packet to pay packet - with 75 per cent of Australians doing so, she says - relate to her experience or her advice as the owner of multiple investment properties?

Bird says she and her former husband were an average couple who took risks that paid off.

"My ex-husband was a migrant and very much had that Asian migrant dream of wanting home ownership," she says. "He was earning below average income and I was an APS4 when we first started investing." Before children, they hosted home-stay students which boosted their income.

"I remember all my colleagues at the time would be like, 'Thank God it's Friday, let's go out for a drink' and I would be like, 'I can't, I have to go home and cook for the home-school students' which was normal for parents, but we didn't have kids then," she says.

They poured their money into property. "You'd buy one property, refinance, take some equity out of that and then you'd buy the next and then you'd buy the next. And I think we were just lucky at getting things at the right time. That said, there was quite a lot of research behind all of them." The portfolio was broken up when they divorced.

"One sold very well, one sold at a loss, most did okay-ish. But when we started in 2001, the property market was actually quite different to what it is now.

"... We had a bit of initial help from his mum and my dad, like a lot of first-home buyers do, but not massive amounts. It wasn't any inheritance or anything like that. It was just a lot of hard work and being frugal for a long time.

"I remember going to a Christmas party at a friend's place and they said, 'Oh, we're going on this European trip and it's going to be amazing' and someone else was like, 'We've just bought this new car' and I was like, 'Well, we just bought this new plastic bucket'," she says with a laugh.

"So how can people relate? Our story didn't happen overnight either. It happened over a period of nine years. Sometimes it doesn't feel like you're getting ahead but all those little things do count."

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