
The beginning [2013]
Steve and Caitlin moved to Perth Australia, like many others, to where the work was, in the mining industry.
At the time of purchasing their first house they had been renting, and also had managed to save a decent amount (20%), which was impressive for first home buyers.
Financial position [2013]
Here is their financial position at the time of purchase:
Income [2013] – $165,000
In 2013 both were working full time. They had a household income of $165,000.
Spending behaviour [2013]
They described their spending behaviour as somewhere between thrifty and moderate. This was little surprise given the amount they had saved.

Assets [2013] – what they own
Savings made up the bulk of their asset position. They had saved enough ($135,000) to cover 20% plus any associated purchase costs for a first time buyer. Something I rarely see in young prospective homebuyers. This relatively large deposit amount gave them good property and lending options.

Liabilities [2013] – what they owe
They had some credit cards they paid off each month and a student debt that was hanging around. Their list of liabilities was brief – no personal loans or car loans. They stacked up well as strong home loan applicants.

Net Worth [2013]
At the time Steve and Caitlin bought their first home they had a net worth of $197,00. This is the difference between what they own and owe. The majority their wealth coming from savings and super.

Their net worth was poised to change dramatically over the next 10 years.
Buying the property [2013]
PURCHASE PRICE – $530,000
What did they buy?
They bought a house on a small block in an up and coming area. The suburb was actively being redeveloped and close to the city.
- 8-year old townhouse
- Two-storey
- 3 beds, 1 bath
- Land size around 300sqm

What did they like about the property?
“While it was a smaller block in a strata, it did not feel that way. We had street frontage; it was open plan and had high ceilings.“
Why did you decide to buy?
“We considered rent as dead money and owning a house was always part of our plan.”
What did you want in a property?
“We just wanted to get into the property market with a starter home, not a forever home.”
What was the market like when you bought?
“We don’t remember there being much competition, but we do remember house prices dropped after buying!
Did they access any concessions / grants/ FHOG?
Yes. They had a significant stamp duty rebate as well as being able to access a $7,000 cash incentive.
What was their buying strategy?
They set their budget and looked within their means.
Being first time buyers there was stamp duty rebates available for purchases up to $500,000. Beyond $500,000 the benefits reduced but were still significant. So, they stay as close to $500,00 as they could.
How much did you spend on improving the property?
“Nothing significant. Just redecoration and cleaning. We repainted the house ourselves.”

My take – Property purchase
Steve and Caitlin chose a clever price point for first home buyers at the time. In 2013 buying in the low $500,000’s enabled access to many of the benefits. Buying at this price also saw off much of the buying competition as not all buyers were able to cover costs of the purchase (like stamp duty) as they increased.
Steve and Caitlin controlled what they could control. Property prices dipped soon after they bought but it did not change their resolve to pay down the home loan quickly.
They did not overspend on improvements. A difficult temptation to resist, especially when they had the money to do so.
The home loan [2013] – $424,000
They borrowed $424,000 at an 80% loan to value ratio (LVR).
- Their deposit came from savings.
- They avoided lenders mortgage insurance (LMI) by keeping the loan to value ratio (LVR) to 80%.
Repayments
They chose interest only repayments. Something that was more common in 2013 due to changes in regulation and interest rates since.
Features
An offset feature was chosen as a place to park savings to offset any interest owed.
How much of your savings was used?
“Most savings went towards to the house purchase. We had about $25,000 as a safety net and for some redecoration.”
How did you feel about taking on a home loan?
“We were used to paying rent and savings. The loan repayments felt manageable. We were very comfortable having a target to aim for based our incomes and how we had been able to save.”
My take – Home loan
While they could have afforded principal and interest repayments, they chose interest only at a time when rates where the same for both repayment options (interest only or principal and interest).
Interest only payments meant their home loan did not reduce. They just had to pay the home loan interest and other costs.
The offset feature meant they could reduce any interest expenses by increasing the balance in the offset account.
This strategy allowed them to preserve their debt.
It was not their forever home. They did not incur much by way of transaction costs when they bought it. So, preserving the debt, rather than paying down the home loan, provided a nice option to switch the property to an investment later.
I introduce borrowers to licensed mortgage brokers so they can get a home loan structure for their unique journey.
Summary of the start [2013]
Spoiler alert. This is how they started, but by 2024 they grew their wealth to over $1.4 million – and have no home loan.

The 10 yr home loan payoff
Here is how they paid their home loan off in six steps.
1. The “Would I borrow for it?” test
“Not really”, was there answer when I asked if they set a budget for their spending.
While they did not strictly budget, they had controlled spending. They regularly questioned ‘nice to have’ purchases and whether these fit with their goals of home loan reduction.
They put much of the home loan success down to the “Would I borrow for it test?”. They applied this test to bigger items they considered buying, like a $40,000 kitchen.
They took the approach that spending $40,000 on a big purchase, will take cash out of the offset account, meaning they incur more interest charges – a bit like borrowing $40,000. The “Would I borrow for it test?” invited a quick self-assessment.
Do they spend the money? Knowing there will be interest charges to follow?
How much do they want it?
Or do they ignore the temptation and carry on towards a their ‘no home loan goal’.
I explore this later with commentary from Steve and Caitlin.
2. Sensible loan
From the outset they set their sights on borrowing an amount they knew they could pay off quickly. They could have borrowed significantly more but resisted the temptation.
They had a household income of $165,000 and borrowed $424,000. This is a loan amount less than three times their combined incomes – which in my experience is on the lower end.
3. Increased income
They saw household income increase mainly through career progression. This saw both base income and incentives increase.
Their household income is now $230,000. Importantly, they were conscious to avoid the lifestyle creep – as income increased, they kept their lifestyle and expenditure in check.
4. Expat work assignment
They accepted an expat work assignment and took advantage of it. It provided opportunities beyond income – like travel and career progression.
Their employer covered many of the expenses while they were away, and they also rented out their property which provided an additional income.
5. Offset feature
The offset account was a where they held their savings. The more held in offset, the less interest they owed.
The less interest owed, the more they saved.
6. Extra payments
Paying off the home loan quickly was always a goal. They became very aware of how much interest is charged in the early years when home loan balances are generally highest.
They used graphs and calculators to understand how making extra repayments (or offset deposits) early can reduce overall loan cost.
Did they holiday?
Yep. Even though they paid down their home loan in under 10 years, and even though they passed on some ‘nice to haves’, they still managed to holiday internationally.
Was paying off the home loan rapidly a GOAL?
“Yes. The goal was to offset the entire loan and continue to save for whatever is next – maybe another home.”
Were there any hurdles?
Is family a hurdle? Having children meant they were down to one income for five years.
Financial position [2024]
With their home loan paid off in 2023 they continued to save and invest their money.
A lot can happen in 10 years – their family grew from two to four.
Income [2024] – $230,000
Income has grown from $165,000 to $230,000 as a household. With kids on the scene, one works full time and one now part-time.

Financial Position [2024]
This is where it gets really interesting.
- They have not acquired any more debt. They paid down what debt they had.
- They invest (shares) now they have no home loan debt.
- They now have a wealth position at their age of $1,410,000 – and no home loan repayments.

My take on their journey
They could have borrowed more and didn’t.
They bought when they were relatively young – ages 24 and 27.
They had one car between them and still do – even with kids.
They are mindful of having things they don’t really need.
The result? No home loan plus significant investments outside of super at around $300,000 puts them in a strong financial position. Now they can make choices around how they spend money, rather than the choice being made for them:
- Schooling
- Upgrading home
- Cars
- Holidays
- Working less
Something to share: From Steve and Caitlin
The “Would I borrow for it?” test is a big takeaway Steve and Caitlin felt consistently kept them on track to being mortgage-free.
“It provided perspective around the home loan impact of some bigger purchases we considered.”
How does the “Would I borrow for it?” test work?
You could call it a sense check.
It tested whether they really needed to spend on non-essential items if it meant delaying their mortgage-free goal.
These borrowers had the money for big purchases. It was in their offset.
Rather than an approach that says, “We have the cash, why not?”, they asked, “Would we borrow for it?”.
A good example of the “Would I borrow for it?” test is spending $50,000 on a new car. If they took the money from the offset, and interest rates were 6%, then that $50,000 not only sets them back $50,000, but also costs 6%, which equates to almost $3,000 in the first year.
Taking out money from offset for large purchases means any offset benefit reduces, so the lender can charge more interest.
A bit like getting a new loan.
It can set you further back from your goal to pay off a home loan quickly.
They applied this principal particularly in the early stages of their home loan journey. They were very aware early overpayments can be a difference-maker when it comes to paying off a home loan early.
They found framing “want-purchases” this way helped pay down their home loan and ultimately – handover less interest to the bank.
What next?
Steve and Caitlin have not ruled out moving house. If they find something, they could upgrade their home with little or no home loan.
And you may have noted – they remain a one car family. There are no plans to change that.
If want to check you have the right home loan structure for your own journey – I introduce borrowers to licensed mortgage brokers here:
Note for readers:
The following may have been altered to retain anonymity of my clients.
– Name of client.
– Facts and figures. These are a combination of verified and unverified amounts. Some have been slightly altered (rounding) to assist with retaining anonymity of my clients. None change the spirit of the story.
Definitions of ratio calculations:
DTI
– The ratio derived from taking all debt limits like home loans, car loans, credit cards, etc
Divided by all annual income – from jobs, rent, etc
Repayment Ratio
– Actual repayments based on interest rate at the time of loan origination over the loan term.
– If interest only repayments were chosen as part of a 30 year term – a 25 year payback period was used in the Repayment Ratio calculation.
Net worth
– Everything owned minus what is owed
– Assets minus liabilities
Definition of no home loan – follow link