In 2015, Sean Cooper did what many of us can only dream: he wiped out his mortgage in just three years — at age 30.
It wasn’t easy and once he achieved his goal, he took a break.
It didn’t last for long.
“I pretty much took it easy for six weeks and then I’m like, better start writing a book,” says Cooper.
After obliterating a $255,000 mortgage on his Toronto house, Cooper got lots of media attention. He also garnered interest from people wrestling with their own large debts.
So he says he decided to write an advice book to help other homeowners free themselves of a mortgage faster.
Canadian household debt has risen to record levels, thanks largely to fat mortgages fuelled by pricey homes.
“I’m just trying to hammer home the point that debt does have a cost,” says Cooper. “If you pay it off a lot quicker, you can save thousands of dollars, tens of thousands of dollars, in interest and be financially free years sooner.”
His self-published book, Burn Your Mortgage, officially launches on March 1, but is available now at some Indigo bookstores.
It’s full of practical advice for average homeowners — people unable or unwilling to go to extremes like Cooper did.
Extreme mortgage burning
When Cooper bought his house for $425,000 in 2012, he moved into the basement and rented out the rest of the house. He also lived super frugally, including making all his own meals.
“Kraft Dinner’s probably been my best friend [for] the last three years,” Cooper admitted at his mortgage-burning party in 2015.
The pension analyst by day also took on two extra jobs: as a financial writer and a clerk in the meat department at a grocery store. Between his work and rental income, Cooper says he netted about $100,000 a year.
He worked up to 100 hours a week, which meant little time for friends and no time for travelling.
“You don’t necessarily need to pay down your mortgage in three years like me. You don’t need to eat Kraft dinner. That was just my path to financial freedom,” he says.
The book covers all stages of the mortgage process — from how to save for a down payment, to how to find a suitable property, to how to chip away at your home loan faster.
So what are Cooper’s top tips? He claims the biggest mistake people make is buying too much home.
“A lot of people think, ‘Oh I’m spending only a bit more on a house, it’s only a one-time expense.’ But it’s going to be eating up your monthly cash flow for years to come.”
Along with that bigger house, comes bigger bills for utilities, property tax and home insurance, Cooper explains. Plus, you’ll need to spend more money to furnish it.
When it comes to getting a mortgage, Cooper cautions not to be satisfied with only a low interest rate. He stresses that it also pays to land one with generous pre-payment privileges that can be key to wiping out a mortgage quickly.
Once a year, people typically can increase their mortgage payments and make a lump-sum contribution up to a specified limit. That lump-sum goes directly toward the principal amount you owe — rather than your added interest charges.
“That’s where you can really knock off a huge balance from your mortgage and get it down really quickly,” says Cooper.
He also recommends putting in some legwork at mortgage renewal time, instead of just accepting your bank’s initial offer.
Customers should shop around and check out mortgage rate comparison websites, says Cooper. That way, they can start their renewal negotiations by showing their bank what competitors are offering.
“If they can even save 0.1 or 0.2 per cent off their mortgage rate, that can add up to thousands of dollars of savings in interest,” he says.
No time out
If people commit to wiping out their mortgage faster, it will remove some of the stresses in their life, says Cooper.
“You don’t have to stay at a job that you hate. Or you might be able to leave the rat race altogether and travel.”
Cooper, however, has no current plans to flee his career. He has been promoted to senior pension analyst, still works as a financial writer and has added a new gig: freelancing as a money coach for people seeking financial help.
Cooper did take one vacation recently: he went to a financial conference in San Diego. And yes, he’s still living in his basement. But he promises he’ll move upstairs and slow down — eventually.
“I don’t want to necessarily work 80 to 90 hours a week. I’d like to settle down and maybe get married one day,” he says.
In the meantime, Cooper is working on his next big goal — investing his money that no longer goes toward mortgage payments. He aims to become a millionaire by the age of 35.
And then perhaps he’ll take some time out … or maybe not.
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