Mortgage Payoff Club!!

[Money Badger]

@LeftA and @Vashy   This thread AFAIK was the original for any mortgage going way back, but over time, the "bracket threads" popped up to share experiences with others in the same stages.    All good to post here anyway...   You're both close on the mortgages, so great job!   

With an economy heading towards recession as we're all being led to believe anyway, can you use all available cash and open a HELOC for the emergency back up just in case?    Saving guaranteed 5% interest (which is after tax money you're paying more like 7% or more) by paying off now, then keeping the flexibility of the HELOC for job change "gaps" and other dramas of life is a good way to get to debt free NOW with some hedge just in case for the future...   Think of it this way... Would you take out a new mortgage for that amount right now just to put cash in the stock market or a savings account for the next couple of years?

[Dutch Comfort]

Update on our mortgage#1 (we have 2 mortgages, but want to get rid of this one ASAP!):
   
Original: 120,000 repayment date 06/01/33
October 2021: 67,000 repayment date 12/01/32
January 2022: 64,000 repayment date 10/01/32
March 2022: 60,500 repayment date 04/01/32
April 2022: 60,000 repayment date 04/01/32 - HALFWAY MARK!!!!!
October 2022: 56,000 repayment date 02/01/32

Yes...... another 2 months shaved off...... The outstanding amount is starting to look smaller and more manageable every month.

[Dicey]

@LeftA and @Vashy   This thread AFAIK was the original for any mortgage going way back, but over time, the "bracket threads" popped up to share experiences with others in the same stages.    All good to post here anyway...   You're both close on the mortgages, so great job!   

With an economy heading towards recession as we're all being led to believe anyway, can you use all available cash and open a HELOC for the emergency back up just in case?    Saving guaranteed 5% interest (which is after tax money you're paying more like 7% or more) by paying off now, then keeping the flexibility of the HELOC for job change "gaps" and other dramas of life is a good way to get to debt free NOW with some hedge just in case for the future...   Think of it this way... Would you take out a new mortgage for that amount right now just to put cash in the stock market or a savings account for the next couple of years?

People forget that during the Great Recession, banks closed and/or froze HELOC's for thousands of customers. They also slashed credit limits. During a No Spend Month, B of A cut my limit by 60%, based on nothing but my "spending patterns". Needless to say, they no longer have my business. Just a friendly reminder that it could happen again.

[alcon835]

@LeftA and @Vashy   This thread AFAIK was the original for any mortgage going way back, but over time, the "bracket threads" popped up to share experiences with others in the same stages.    All good to post here anyway...   You're both close on the mortgages, so great job!   

With an economy heading towards recession as we're all being led to believe anyway, can you use all available cash and open a HELOC for the emergency back up just in case?    Saving guaranteed 5% interest (which is after tax money you're paying more like 7% or more) by paying off now, then keeping the flexibility of the HELOC for job change "gaps" and other dramas of life is a good way to get to debt free NOW with some hedge just in case for the future...   Think of it this way... Would you take out a new mortgage for that amount right now just to put cash in the stock market or a savings account for the next couple of years?

People forget that during the Great Recession, banks closed and/or froze HELOC's for thousands of customers. They also slashed credit limits. During a No Spend Month, B of A cut my limit by 60%, based on nothing but my "spending patterns". Needless to say, they no longer have my business. Just a friendly reminder that it could happen again.

This is such a good point and a big reason why a HELOC is not part of my emergency fund.

[Money Badger]

2008/9 was the worst since the 1930s and life is all about risk vs. reward.   Having a mortgage overhead you can eliminate is worth the risk of eliminating it.    If HELOCs that are in place already are restricted, then time for a side hustle.   Control your destiny.

[Lilium]

Looks like I missed updating April...

Start: 168,090
Extra April: 2256
Extra May: 856

New Balance: 153,474

8.5% (?) paid off this year, so far.

It's been a hot minute since I've updated here.  Some progress has been made but not as much as I had hoped for. 

Start 168,090

Extra 2021 - 18,246.18
Extra 2022 - 2585.47

End 2022 137,294.50

Between regularly scheduled payments and extra principal, the balance has been brought down by 30,795.50 in just about 2 years. 

[Vashy]

Dropped a chunk of my annual company profits into the mortgage and now at £33k. Our mortgage deal runs out this month, which would get us from a 2.5% tracker mortgage to the bank's "standard rate" (currently around 5%).

At this point, it makes no sense to get another two-year mortgage for a £1k fee - worst case, we'll pay this off in three years, best case I feel we could crush it in in 12 months' time. I'm getting a severance package from my ex-employer that would take care of the whole remaining debt, though I'm loath to reduce my financial flexibility that much, so I'll likely just drop in £10k or so at the end of the year and carry the rest of it for another year. With the UK capital markets in turmoil because we have a bunch of lunatics in charge of the asylum, I'm planning for every contigency.

Meh, checked again and the mortgage runs out next year (October 2023). I've set that as the goal for paying it off completely, though my income situation is somewhat in flux right now so hard to forecast cash flow.

Down to £32,700 in the meantime. Currently paying c£86 in interest per month on that.

[wkumtrider]

Made my last mortgage payment at the end of October.  100% debt free, can't believe it. 

[alcon835]

Made my last mortgage payment at the end of October.  100% debt free, can't believe it.

Heck yeah!!!! CONGRATULATIONS!!!!!!! That is so awesome!!!!

[ATtiny85]

Made my last mortgage payment at the end of October.  100% debt free, can't believe it.

Nice, congrats. It affords a different type of flexibility. We paid off ours several years ago, but due to an ill-timed corporate move we have a small mortgage now. It is at an insanely low interest rate, but we will still likely pay it off before long. We fill all other investment buckets we need to in order to reach our targets on time.

[Money Badger]

Made my last mortgage payment at the end of October.  100% debt free, can't believe it.

This is great work!   Go walk barefoot on the floor and the yard and enjoy the moment.   Rarely does anyone notice unless you brag about it though.   No music plays.   No award bell sounds.   But now you are ready to CRUSH it with your investments of that free cash flow.  All your  money works 24x7x365 for you 100% now.   Awesome!   

[rmorris50]

@LeftA and @Vashy   This thread AFAIK was the original for any mortgage going way back, but over time, the "bracket threads" popped up to share experiences with others in the same stages.    All good to post here anyway...   You're both close on the mortgages, so great job!   

With an economy heading towards recession as we're all being led to believe anyway, can you use all available cash and open a HELOC for the emergency back up just in case?    Saving guaranteed 5% interest (which is after tax money you're paying more like 7% or more) by paying off now, then keeping the flexibility of the HELOC for job change "gaps" and other dramas of life is a good way to get to debt free NOW with some hedge just in case for the future...   Think of it this way... Would you take out a new mortgage for that amount right now just to put cash in the stock market or a savings account for the next couple of years?

People forget that during the Great Recession, banks closed and/or froze HELOC's for thousands of customers. They also slashed credit limits. During a No Spend Month, B of A cut my limit by 60%, based on nothing but my "spending patterns". Needless to say, they no longer have my business. Just a friendly reminder that it could happen again.

This is such a good point and a big reason why a HELOC is not part of my emergency fund.

This is always a risk with a line of credit as an emergency fund. In a major crisis you may not have access to it especially if everyone is running to the institution at the same time.

Guess if one is truly worried about a HELOC shutting down you’d have to draw the money out and put in another account and then pay the HELOC interest. Expensive cost to ensure liquidity tho.

Why am I reading this thread? I love my 2.5 percent fixed rate mortgage, and inflation is making it cheaper every day.


Sent from my iPhone using Tapatalk

[Vashy]

Meh, checked again and the mortgage runs out next year (October 2023). I've set that as the goal for paying it off completely, though my income situation is somewhat in flux right now so hard to forecast cash flow.

Down to £32,700 in the meantime. Currently paying c£86 in interest per month on that.

Mr Vashy put some excess cash in that he had sitting in his account. We're now at £29,000; latest interest payment was >£100. We'll try and kill the mortgage by end-2023, maybe end-2024, depends on whether I score that high-paying 12-month contract or not (will know this month, I hope). 

[Money Badger]

@Vashy   Way to go!

To the folks who worried about HELOCs being "taken away from them" above... The extents people will go to in order to hold a mortgage over their head to avoid a tiny risk of liquidity issues are the result of a debtor culture since the post-WWII years that assumes it's OK to have "good debt".   The risk of having liquidity issues is far higher when you HAVE to pay the bank every month to keep the roof over your head, particularly when times are bad.   Instead, being debt free freeing up cash flow and building one's own cash emergency reserves and investments that pay you interest when times are good or mediocre is controlling your destiny.  (Adding a HELOC if necessary as a backstop for those who need a safety net just in case of the chance they need more liquidity).   Far better to be debt free than to talk one's self into inaction and letting a mortgage hinder your mood, decisions and financial opportunities just because of the risk of HELOC liquidity issues when times are bad once every 50 years or so.

[rmorris50]

@Vashy   Way to go!

To the folks who worried about HELOCs being "taken away from them" above... The extents people will go to in order to hold a mortgage over their head to avoid a tiny risk of liquidity issues are the result of a debtor culture since the post-WWII years that assumes it's OK to have "good debt".   The risk of having liquidity issues is far higher when you HAVE to pay the bank every month to keep the roof over your head, particularly when times are bad.   Instead, being debt free freeing up cash flow and building one's own cash emergency reserves and investments that pay you interest when times are good or mediocre is controlling your destiny.  (Adding a HELOC if necessary as a backstop for those who need a safety net just in case of the chance they need more liquidity).   Far better to be debt free than to talk one's self into inaction and letting a mortgage hinder your mood, decisions and financial opportunities just because of the risk of HELOC liquidity issues when times are bad once every 50 years or so.

And the faster you pay off your mortgage, the higher the liquidity risk, and thus why having a HELOC open can be a good idea. Hard for most people to both pay the mortgage early and build a substantial liquid savings. PAlso, individuals will face several times of financial stress in there life time, regardless of how the economy is doing.


Sent from my iPhone using Tapatalk

[Dutch Comfort]

Update on our mortgage#1 (we have 2 mortgages, but want to get rid of this one ASAP!):
   
Original: 120,000 repayment date 06/01/33
October 2021: 67,000 repayment date 12/01/32
January 2022: 64,000 repayment date 10/01/32
March 2022: 60,500 repayment date 04/01/32
April 2022: 60,000 repayment date 04/01/32 - HALFWAY MARK!!!!!
October 2022: 56,000 repayment date 02/01/32
December 2022: 53,000 repayment date 10/01/31

Used big part of my bonus to do an extra payment on the mortgage. 4 months closer to full repayment!

[Money Badger]

Way to go @Dutch Comfort!   The end date seems different from US mortgage amortizations though...  You've paid more than half the balance, but the end date only shortens a couple years (from 2033 to 31)   In the US, the payments would stay the same and more principal prepayment would reduce the balance each month (most US mortgages do so anyway as long as the payment forms online specify where to apply such "overpayment" of the monthly amount)... Do they only remove interest from the payments schedule as you reduce the balance and leave the principal payments for the entire term?  or something else different?   

[Alfred J Quack]

Way to go @Dutch Comfort!   The end date seems different from US mortgage amortizations though...  You've paid more than half the balance, but the end date only shortens a couple years (from 2033 to 31)   In the US, the payments would stay the same and more principal prepayment would reduce the balance each month (most US mortgages do so anyway as long as the payment forms online specify where to apply such "overpayment" of the monthly amount)... Do they only remove interest from the payments schedule as you reduce the balance and leave the principal payments for the entire term?  or something else different?

With my bank (also Dutch) they defaulted to shortening the run time but I specifically asked them to reduce the monthly payment in stead. My reasoning at the time was that if I came into financial distress, the lower monthly payment would be beneficial whereas the shorter run time of the mortgage would not.

[LeftA]

With tomorrow’s payment, we will be at $29K something owed! We now have less than 6 months to go.

[Trifle]

With tomorrow’s payment, we will be at $29K something owed! We now have less than 6 months to go.

Fantastic -- great job @LeftA! That will be here before you know it.

[Purple_Crayon]

Paying down the mortgage was a focus of 2022, in the hopes that it would increase cashflows needed for planned FIRE in the next few years. Here's how it panned out:

Jan: $60,234.83
Feb: $59,288.26
Mar: $58,339.23
Apr: $57,387.73
May: $56,433.75
Jun: $55,477.28
Jul: $54,518.32
Aug: $8,439.68 (switched jobs in April and had to exercise all stock options within 90 days -- dropped the proceeds on the house)
Sep: $4,350.42 ($3,000 extra payment)
Oct: $0 (Called when I noticed the escrow balance would cover the rest of the house, and had them pay it off)

I made it! Stoked to see everyone kicking butt on their respective journies!

[Trifle]

Huge congratulations @lilkidjesus !  How does it feel?

[Purple_Crayon]

@Trifele It definitely makes expense planning for FIRE scenarios a lot more real. I will say, though, I didn't realize my property taxes were due in November. I was all stoked to have my first ever month without a mortgage payment, and then I ended up owing more than a normal payment to pay my taxes. I was like: "Come on, really!?"

But yeah, it's great. Definitely more peace of mind and cashflow flexibility in my planning.

[alcon835]

Whoa, it has been quite awhile since I updated my numbers! 2022 was an interesting year. Due to some life uncertainty we dropped our mortgage payments down to the minimum and poured those funds into other things. Nothing wrong with that, but it did slow down our mortgage payoff quite a bit.

1/1/21 Balance:   $161,448
1/1/22 Balance:   $142,583
1/1/23 Balance:   $130,075

We'll be deciding over the next few days how much we want to put into our mortgage this year. In 2022 it was the minimum, but I think we'll want to increase that for 2022. Not nearly as aggressive at it as we were in 2021, but it is still important to me that I pay off my mortgage by end of 2026. Lots of progress needs to be made if I'm going to pull that off. But I think its realistic if I can hit some of my other financial goals.

Here's to another year inching ever closer to being mortgage free!

[Dutch Comfort]

Way to go @Dutch Comfort!   The end date seems different from US mortgage amortizations though...  You've paid more than half the balance, but the end date only shortens a couple years (from 2033 to 31)   In the US, the payments would stay the same and more principal prepayment would reduce the balance each month (most US mortgages do so anyway as long as the payment forms online specify where to apply such "overpayment" of the monthly amount)... Do they only remove interest from the payments schedule as you reduce the balance and leave the principal payments for the entire term?  or something else different?

With my bank (also Dutch) they defaulted to shortening the run time but I specifically asked them to reduce the monthly payment in stead. My reasoning at the time was that if I came into financial distress, the lower monthly payment would be beneficial whereas the shorter run time of the mortgage would not.

Yes, the default here is to shorten the run time, but I can opt for reduction of the monthly payment. For now, we’re in the position that we do not expect any financial distress soon, so we’re shortening the run time as much as possible.
We only started the extra repayments about 2 years ago when we finally came into a more financially secure situation and had the option to decide what to do with extras. Before that, it was a more paycheck-to-paycheck situation. But then I found a couple of likewise minded people and discovered MMM and here we are now……

[grantmeaname]

Hi gang! Looking forward to joining the club!

I bought a house (yay!) and got a mortgage (boo!)

Home value $465k
Equity $105k ($93k down payment, $1400 amortization plus $10k overpayment the first month,)
Mortgage balance $360k
4.99% 15-year mortgage (locked in September, closed in November)

My annual bonus is a big part of my yearly income and comes in February. I'll be making $2400 overpayments every month, and hopefully with that and three big February lump sums I'll be able to kill the mortgage in February '25. This year's bonus will have competing spending priorities in home efficiency/carbon projects - a ground source heat pump and solar panels.

My investments are at around $500k and that pace of payoff should leave room to get them in the $800k-1m range by February '25 and then I'm done with the rat race (probably?)

[Trifle]

Sorry you haven't gotten to enjoy the feeling yet @lilkidjesus -- you will in the next few months. 

Nice, aggressive plan @grantmeaname -- love it.  I did the same thing.  Super aggressive payoff coinciding with FIRE.  Good luck to you!

[grantmeaname]

Do you ever lie awake at night thinking "I wish I owed JP Morgan money still and had tens more shares of VTSAX?"

[Trifle]

Do you ever lie awake at night thinking "I wish I owed JP Morgan money still and had tens more shares of VTSAX?"

AHAHAHAHAHAHAHAHAHAHAHA!

[alcon835]

Do you ever lie awake at night thinking "I wish I owed JP Morgan money still and had tens more shares of VTSAX?"

LOL!!!!!!

[TyGuy]

Happy New Year Everyone! I am joining this thread to track my mortgage pay down. I currently have a 15 year loan with ~13 years remaining at 1.75%. Due to the super low interest rate, I typically don't make large additional payments towards principle, but I may in the future depending on market conditions and/or personal finance conditions (I would like to have my mortgage payed in full before my future retirement).

[Money Badger]

Do you ever lie awake at night thinking "I wish I owed JP Morgan money still and had tens more shares of VTSAX?"

ROFL!  NEVER!!

[Dutch Comfort]

Do you ever lie awake at night thinking "I wish I owed JP Morgan money still and had tens more shares of VTSAX?"

LOL!!!!
Happy 2023 and happy (early) repayments!

Just did the budget for 2023 and hoping to make another big dent into the mortgage this year (from 53 to 43 is a stretch goal, but this is the challenge for this year with our modest salaries)!

[Money Badger]

@Dutch Comfort,  This is awesome!   Great discipline to stay focused on eliminating that debt so you open up so many other good financial options with that new free-cash flow soon!

[Just Joe]

Watching the news recently with all the layoffs just reinforces our resolve to get our place paid off. We have several years left but making progress.

[LeftA]

Down to $25.3K as of today! Our days of having a mortgage are numbered.

[Trifle]

Down to $25.3K as of today! Our days of having a mortgage are numbered.

Awesome @LeftA! 

[cdub]

Down to $25.3K as of today! Our days of having a mortgage are numbered.

That's awesome!

[cdub]

I started a quest to pay off my mortgage! I even created a blog to document my journey.

https://mortgagepayoff.club/

Who's with me?

Paying off our mortgages would certainly be badass. (I hope you enjoy the blog too)

EDIT - updated URL with new domain for the site :)

Haven't been to these forums in a while. Glad to see this thread took off!

I updated the above link because the original link doesn't work anymore (link above works)

Murphy hit big time for me in 2014 (medical emergency) so my payoff journey got sidetracked. Looking to start it up big time soon as soon as my EF gets fully funded in March.

We've had 10 members of our site fully pay off their mortgage. :) Hopefully I'll finally join their ranks in a couple of years.

https://mortgagepayoff.club/

[Trifle]

Welcome back OP!  Thanks for starting this thread, 10 long years ago!

[cdub]

Welcome back OP!  Thanks for starting this thread, 10 long years ago!

Yeah time really flies! Glad to get back on track again. Financially I'm fine but haven't made much progress in the mortgage and of course would love to have more squirreled away for retirement. Seemed like I had a ton invested but lost* a bunch with this most recent big drop in the market.

I'm really looking forward to attacking the mortgage again. If my wife's on board I'm thinking of just living off of my salary and throwing her entire salary at the mortgage. I know it's doable as we went a year already on my salary alone recently.

*haven't sold a penny so haven't really lost anything yet.

[ProxyRetired]

Paid off our solar panel loan (hey, they're on the house!) - saved $13K in interest. Four year ROI on panels expected (if power costs don't go up, haha).

Turning our sights on the mortgage next, three years to go!

[grantmeaname]

That's awesome! What part of the country? I'm looking at 12-13 year payback - really poor.

[ProxyRetired]

That's awesome! What part of the country? I'm looking at 12-13 year payback - really poor.

Midwest. Our state has nice grant programs, SRECS, and we fully captured the 30% federal tax credit. It might end up being more like 8 years, since we also made some investments in insulation and appliances. Kind of a wash; ultimately, I can blast my A/C in the summer and not feel guilty. :)

[grantmeaname]

Yesterday DW and I made a mortgage payoff thermometer on poster board to give us something tangible to look at, so the next couple years of saving isn't just bits on a computer screen. Each square is $5k, and if we do the level of overpayments I'm hoping for we can get a square every other month plus a big burst of progress each February in bonus month.

[Trifle]

I love the thermometer @grantmeaname! 

In my last 100-day lead up to FIRE I had a coloring page (a lovely beach scene) with 100 sections.  I colored one section in every day after work, starting with the sand and seashells and working my way up to the sun.   

[grantmeaname]

wow, I love that!

[ProxyRetired]

Going half in for the year. We had planned to snowball our mortgage since we paid off a couple things, but given the looming recession, and a likely war over the debt limit in Congress, we're going to split in half what we we're going to put in, and save the rest in cash. We'll only lose a couple hundred in interest long term, but it'll beef up our war chest incase things get wonky this summer and fall.

[LeftA]

@grantmeaname , that’s a fun way to track progress!

We started not too far away from you at $475K, about 10 years ago. We’re now at just over $22K owed.

[Money Badger]

Going half in for the year. We had planned to snowball our mortgage since we paid off a couple things, but given the looming recession, and a likely war over the debt limit in Congress, we're going to split in half what we we're going to put in, and save the rest in cash. We'll only lose a couple hundred in interest long term, but it'll beef up our war chest incase things get wonky this summer and fall.

Once you guys have saved a full 6 months of cash for all living expenses, there's no "half way" to killing a mortgage debt every year as long as your health is good so you can make a living.   The inertia factor is just too hard to resist as life nags you for that "half" sitting on the sidelines.   Killing that debt is a 24 hour a day, find any legal way, every day passion to kill the mortgage and get that sweet release letter from the mortgage service.   It's amazing what you can find to accelerate this... Renegotiate cable/cellular/home/auto insurance/security services and ANYTHING that depreciates.  Heck, search under your sofa cushions and the ones at your friends house to find shekhels that drop that principal balance!   The point is it has to be a passion to be free of debt or you simply likely won't be.   Short term sacrifice results in free cash flow, then long-term wealth acceleration as you apply that free cash flow to build a far larger nest egg with a confidence that simply isn't there with a large mortgage overhead.    Don't just be an animal about this... Be a friggin' Money Badger about it!  ;-)