How to Build Your Dream Home Mortgage Free (or with as little of a mortgage as possible)

Being debt/mortgage free is one of the best feelings in the entire world. We are mortgage free on our rental property and words cannot describe the freedom we feel from not having that weight on our shoulders. Having that taste of mortgage freedom has pushed us to set a goal to eliminate our mortgage as quickly as possible on our forever home. At the end of construction we will have a small mortgage which we intend to pay off in less than 10 years. We took or are taking these steps in order to achieve our goal. Hopefully these tips can help you achieve mortgage debt freedom.

Build simple

We didn’t follow this advice but building a simple rectangle house with a basic roofline costs a lot less than a house with complex roofline and weird shape with lots of corners. The finishes you choose also will obviously impact your price. We are considering building another house to sell and it will be basic home with basic finishes.

Use equity from assets

Since we own a rental home outright, we pulled equity from our paid off home to fund about 60% of our build. Construction loans have high interest rates (about 5%) and numerous restrictions. Since the house was paid off we had to add a mortgage to it in order to access the money. We were able to get a variable rate mortgage at prime – 0.8%. This technically is still debt but I wanted to mention it because it allowed us to save a lot of money and alleviated the restrictions that construction loans have.

Increase your salary

Your most powerful wealth building tool is your income. Book a meeting with your employer and ask for a raise. Pick up extra shifts. Get a second job. If you are self employed, work harder or charge more. I know it is easier said than done but know your worth and ask for it. The worst they can say is no!

Reduce your lifestyle

I recommend reducing your expenses to their absolute bare minimum before you start building. Look at your biggest monthly expenses and go from there. For most people it is home, vehicle, daycare, vacation and food. Remember that delayed gratification is the sweetest joy. I love Dave Ramsey’s quote, “If you live like no one else, later you can live like no one else”

  • Vehicle. Sell your car & buy the most reliable car you can afford with cash. (Yes – even if it is 0% financing , don’t be tempted).
  • Home.
    • A. If you own a house, rent out a room or the basement.
    • B. If you are transient, rent the cheapest condo/house you can or live with family members.
  • Utilities.
    • Call your utilities every month. A simple phone call and one hour hold time often leads to a reduction in your monthly phone & utility bills.
    • Only have one monthly entertainment subscription. I chose Netflix. Use Spotify for free even if your friends make fun of you at parties
  • Food.
    • Bring your weekly grocery budget in cash and add up items in your cart with my phone’s calculator as you shop.
    • Meal plan
    • Push as much time between grocery store visits. It will make you get creative , eat leftovers and do pantry clean-outs.
    • Reduce alcohol consumption or limit premium options. I don’t follow this. I love expensive wine too much.
  • Daycare. I’m no help here. Send them to a budget friendly provider?
  • Vacation . Sorry no vacations.
  • Clothing. When you need to replace an item in your wardrobe, only buy high quality, timeless pieces and take care of them with regular dry-cleaning/pressing/steaming.
  • Beauty. Thanks to COVID monthly hair/manicure/pedicure appointments and weekly spray tans are a thing of the past. Learn how to do these things at home.

Save as much money as possible before you start building

It is so obvious but I cannot stress this enough. Bulk up your savings account as much as possible can before you even consider building. It is a mindset easy to spend the Bank’s money but when it is your hard earned cash, it makes you second guess every purchase. You need immediate access to cash at all times so put it in a regular savings account with the highest interest rate you can find

If you do have to take a mortgage, make sure you can pay it off in 15 years and it fits your budget

Financial experts all say your housing should not take up more than 35% of your take-home household income. 35% should include all housing costs – mortgage payment, taxes, maintenance and insurance. I recommend 15 years or less because the 30-year mortgage bounds almost your entire adult life to a mortgage payment. The normalization of the 30-year mortgage has caused people to lose hope of ever being debt-free. It also has created a constant state of bondage for the working class.


Brent and I have completed almost 80% of the house ourselves and have outsourced the rest. Know what your skill level limits are but also challenge yourself. Painting/ Flooring/ Trim carpentry/ Landscaping are all things you can learn to do yourself. If you take unpaid time off from your day job to do a task at your house remember to calculate your loss in salary vs. the cost to pay someone else to do the work.

Buy secondhand and live without

Another way to lower your build cost is to purchase items that are easily replaced/upgraded secondhand. Example: light fixtures, bathroom vanities, appliances/etc. I will do a separate post on all the things I have purchased secondhand. It takes time and patience but worth it. If you put these things on your mortgage , your $100 light fixture dramatically increases in price due to interest.

In 2020, items like dryers, dishwashers, bar fridges, microwaves and garage door openers considered essentials in homes. Remind yourself that these things are modern conveniences and you can live without them until you have enough money saved up. Prioritize important / essential things over modern conveniences.


This takes a lot of time but it will save you a lot of money. I went from window manufacturer to window & door manufacturer and said this was so and so’s price, can you beat it? It took me hours but my quote started at $55,000 and I got it down to $22,000 taxes included.

Challenge your budget

I like to set little challenges for myself to reduce category budgets. This is more of a mindset reset. Say you crossed your t’s and dotted your i’s and set a low budget of $10,000 for flooring at the beginning of the build. Challenge yourself to get it to $9000. Even if you did your due diligence, there are always ways to push yourself.

Build slow

When you are building yourself only on evenings and weekends, building is inevitably slow. It is advantageous in that you are able to save money in between major tasks and replenish your chequeing account before the next major purchase. IE. It is taking us about 1 month to complete the exterior siding. In the meantime, I am saving up for bathroom fixtures and flooring.

Buy slow

Almost every week I make a little, essential purchase for the house. I know it all comes out in the wash but small, incremental purchases are easier to wrap my head around than large, one-time purchases. For example, we need 3 toilets for the house. Each toilet costs $214. Instead of buying all three at once ($642) I made it a point that every few weeks when I go to Costco, I buy a toilet. It’s also easier for me to lift haha

Use your points

When you start to build, get a credit card with great points. I am a big fan of Aeroplan program (Both Visa andMastercard support Aeroplan) as well as the American Express reward program. I was able to use our Aeroplan credit card and my travel points to purchase a $2500 bathroom vanity at Costco. I also used my Airmiles to buy a Nest thermostat and a SamsungFrame TV. Would I have preferred to have an all inclusive 2 week holiday to Hawaii for 2 people at a 5-star Marriott resort. Yes, yes I would have. I even went as far as “pretend” plan our vacation. These are sacrifices but I know there will be plenty of time to holiday when we are mortgage free.

Plan meals

When you come home at 9pm and are exhausted from building all day, the last thing you will want to do is make a dinner. You will be so tempted to order a pizza or go to a restaurant. Not only is this unhealthy but it is so expensive. Make a point to have healthy, convenient foods and give up your inner foodie for the time being. You cannot spend time making elaborate dinners even if you crave them. We eat a lot of Costco rotisserie chickens with bagged salad, crockpot meals, homemade soups, breakfast for dinner and sheet pan dinners. Anything healthy and fast.