Mortgage Payoff Club!!

[channtheman]

I love this thread and it makes me think about how I paid off my mortgage and the benefits I have received as a result.

I payed off my rather small mortgage of ~$90k March 2021 (31 months ago) when I had a NW of $499k.  Took me around 6 years since the day I closed on my property.  I went intense and used all of of my cash (aside from $10k emergency fund) + all index funds in my taxable brokerage account to pay off my mortgage.

Now in November of 2023 my NW is over $900k which is a $400k gain since I paid it off under 3 years ago. My taxable brokerage account to $125k, and have around $80k in cash.  This doesn't include my gains from being about to max out my 401k every year.

I love opting out of these silly games people play to keep debt around.  I think there is so much value in just keeping it simple.

Good luck to everyone in their journey to pay off their mortgage!

The most surprising thing for me was how much more money we made because of this goal.  If my goal was simply to stash as much cash into index funds as possible, I never would have worked like a dog this year working 50-60 hours a week.  That kind of sacrifice for me and my family would not feel worth it to simply put another 30k into retirement funds.  But, with the reward of being mortgage free, my wife and I could mentally get behind working that much and as a result we have made significantly more money this year than we ever would have if that wasn't the goal.

[mastrr]

I love this thread and it makes me think about how I paid off my mortgage and the benefits I have received as a result.

I payed off my rather small mortgage of ~$90k March 2021 (31 months ago) when I had a NW of $499k.  Took me around 6 years since the day I closed on my property.  I went intense and used all of of my cash (aside from $10k emergency fund) + all index funds in my taxable brokerage account to pay off my mortgage.

Now in November of 2023 my NW is over $900k which is a $400k gain since I paid it off under 3 years ago. My taxable brokerage account to $125k, and have around $80k in cash.  This doesn't include my gains from being about to max out my 401k every year.

I love opting out of these silly games people play to keep debt around.  I think there is so much value in just keeping it simple.

Good luck to everyone in their journey to pay off their mortgage!

The most surprising thing for me was how much more money we made because of this goal.  If my goal was simply to stash as much cash into index funds as possible, I never would have worked like a dog this year working 50-60 hours a week.  That kind of sacrifice for me and my family would not feel worth it to simply put another 30k into retirement funds.  But, with the reward of being mortgage free, my wife and I could mentally get behind working that much and as a result we have made significantly more money this year than we ever would have if that wasn't the goal.

Very good point and love it!  Paying off your mortgage is an awfully big and rewarding carrot to dangle in front of yourself.  It creates a sense of urgency that wouldn't be there otherwise.  The return on having this goal is huge.
 I'm always looking for angles like this to more effectively manage myself, thank you for sharing.

[Trifle]

I love this thread and it makes me think about how I paid off my mortgage and the benefits I have received as a result.

I payed off my rather small mortgage of ~$90k March 2021 (31 months ago) when I had a NW of $499k.  Took me around 6 years since the day I closed on my property.  I went intense and used all of of my cash (aside from $10k emergency fund) + all index funds in my taxable brokerage account to pay off my mortgage.

Now in November of 2023 my NW is over $900k which is a $400k gain since I paid it off under 3 years ago. My taxable brokerage account to $125k, and have around $80k in cash.  This doesn't include my gains from being about to max out my 401k every year.

I love opting out of these silly games people play to keep debt around.  I think there is so much value in just keeping it simple.

Good luck to everyone in their journey to pay off their mortgage!

The most surprising thing for me was how much more money we made because of this goal.  If my goal was simply to stash as much cash into index funds as possible, I never would have worked like a dog this year working 50-60 hours a week.  That kind of sacrifice for me and my family would not feel worth it to simply put another 30k into retirement funds.  But, with the reward of being mortgage free, my wife and I could mentally get behind working that much and as a result we have made significantly more money this year than we ever would have if that wasn't the goal.

This. ^   Paying off a mortgage is so much more than "the math."     

[Money Badger]

Totally agree @Trifle...    Free cash flow from debt elimination and the mental toughness to avoid taking on new debt it usually brings simply changes the personal finance situation and gives you FAR greater control of your destiny.  The mental perspective changes from "hunted" to "hunter" as you hunt rates of return on your money without worrying about being "hunted".   Leveraging to buy property seems like smart money to some of course if it works in upward real estate markets and if you're mobile and/or lucky on timing...   Those who were so proud of themselves just 2 years ago for being "smart with good debt" are now being "hunted" by their lender with each tick upward of the 10 year bond rates and corresponding mortgage "adjustments".   

[AFrugalGuy]

OK, I'm in. Currently at $501,116.37 at 6.2%. Amortization at our current payment is 8 years, 35 weeks. Paying ~$30k lump sum on principal as of January 1st. We hope to be done in 5 years.

[Trifle]

OK, I'm in. Currently at $501,116.37 at 6.2%. Amortization at our current payment is 8 years, 35 weeks. Paying ~$30k lump sum on principal as of January 1st. We hope to be done in 5 years.

That's a nice round-number/round-date challenge.  Go @AFrugalGuy! 

[Davids]

I paid mine off a few days ago. I don't think I will really start feeling it until next month when there is no monthly mortgage payment taken out of my bank account. But heck yeah it feels good to have a fully paid off home!!

[grantmeaname]

Fuck yeah! Congrats!!!

[Trifle]

Huge congrats @Davids!!!

[Dutch Comfort]

I paid mine off a few days ago. I don't think I will really start feeling it until next month when there is no monthly mortgage payment taken out of my bank account. But heck yeah it feels good to have a fully paid off home!!

YEAH!!!!! Congrats!!!!! You ended 2023 with a big bang!

[Money Badger]

I paid mine off a few days ago. I don't think I will really start feeling it until next month when there is no monthly mortgage payment taken out of my bank account. But heck yeah it feels good to have a fully paid off home!!

It smells like... VICTORY!   It feels even better about a year later when you compare your net worth after putting all that free cash flow to work.  And NW accelerates year over year after that if you reinvest the divvys and avoid lifestyle creep.    Way to GO!

[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: EUR 53,000 repayment date 10/01/31
April 2023: EUR 49,000 repayment date 06/01/31
May 2023: EUR 45,500 repayment date 12/01/30
June 2023: EUR 44,500 repayment date 11/01/30
November 2023: EUR 41,500 repayment date 10/01/30
December 2023: EUR 41,000 repayment date 10/01/30

Stretch goal: full repayment in 2027!

Proud that we managed to do 2 years worth of regular repayments in 1 year! If we continue this pace, we can be finished in 2027 and have a huge monthly cashflow increase (which I'm really looking forward to...... just the freedom of being able to decide for myself what to do with MY MONEY)!

[Dogastrophe]

Hi all, we are at the point where our tax advantaged accounts (RRSP, TFSA) are fully funded and, rather than open taxable accounts, we've decided to divert extra $$ toward our mortgage.

Jun 2018: $243K (original balance; initial 5-yr term, 20-yr amortization)
Jan 2019: $237K
Jan 2020: $227K
Jan 2021: $211K
Jan 2022: $205K
Jan 2023: $194K (math made sense for an early renewal mid-Jan for a 4-yr term)

Current balance is $182K
3 yrs 1 mos left on the current term @ 5.73%
9yr 10mos amortization remaining
Weekly mortgage payments

Our mortgage allows us to pre-pay up to $36K during each term year, increase our regular payment by up to 15% each term year, and or make a full extra payment on any / all regular payment dates.

We're going to take advantage of the first two options and see how it goes for the first year. For the last month of the current 'term year' we have increased our payment by 15% ($50 per week) and will increase it by another 15% (additional $70/wk) in mid-Jan. We applied a lump sum of $1500 a couple days ago and plan to direct an additional lump sums against it through out the year.

Our goal is to have a sub-$75K balance by the time our renewal comes due, a reduction of ~$72K from the do-nothing balance

[IrishEngineer]

I just got off the phone from the bank, where I requested a letter with a redemption value. I could be mortgage free within weeks. Shaking a little thinking about it, want to scream from the rooftops, but that's not really the done thing. So I thought I'd post it here instead if that is OK!

My wife and I have had help from family and were very fortunate to receive inheritances from much missed relatives. But we also worked hard, saved a lot and have overpayed since day one! I might crack open a can of beer tonight.

[Trifle]

I just got off the phone from the bank, where I requested a letter with a redemption value. I could be mortgage free within weeks. Shaking a little thinking about it, want to scream from the rooftops, but that's not really the done thing. So I thought I'd post it here instead if that is OK!

YES!!!  Epic first post @IrishEngineer.  Welcome, Congratulations! and enjoy that beer!!!

[grantmeaname]

It's your rooftop, soon to be unencumbered. Scream away :)

[Vashy]

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).

Dropped in more cash when we renewed the mortgage - now standing at £17,200, with a goal to kill it by end-2024 or earlier.

Now at £13,200 - still on track to kill it by end next year.

Am on a relatively low-paid 6-month contract, so the big swings at the mortgage didn't happen. That said, I've just wrapped my taxes for my side hustle company and put most of the profits/dividends into the mortgage. We're now at £8,000. I may land a highly paid 6-month contract in today's job interview, at which point we'll kill the rest by end of the year. The end is very much in sight. We may take on a small (i.e. 50-60k or 10% of the value of the house) loan against the house to get the loft converted (which should very much increase the value of the house and also have a huge benefit in terms of quality of life), but all of that depends on how the chips fall.

For the moment, I can smell mortgage freedom.

I did land the highly paid contractor role and we're now at £7,000 balance outstanding. Definitely killing the rest by year-end.

Now at £6,500 left. Sat down with Mr Vashy and decided we'll gift ourselves mortgage freedom for Xmas. At that point, we'll have paid down £200,000 in 13 years.

Mr Vashy had some free cash (£1,500), I pulled the rest from a savings account. As at yesterday, we're mortgage-free and own our house outright. It's a very different feeling.

[grantmeaname]

Congrats, Vashys, great work!

[Trifle]

Congrats @Vashy !!!  What a great gift to yourselves.  Enjoy that feeling!

[Vashy]

Thank you both, @Trifle and @grantmeaname! Now waiting for paperwork/a letter to arrive, but generally happy that the mortgage won't figure in any further financial planning.

[IrishEngineer]

Thanks, and I’m happy to confirm that as of today my mortgage is paid off. Just under 9 years since we bought the house, and we are both 42. So what’s next?

[grantmeaname]

Fuck yeah! Congrats Irish Engineer!

[grantmeaname]

I had a bit of employment instability that's cleared up so I got to throw a decently sized lump sum I had been holding in my savings account at the mortgage this month. We're at a $324k principal balance now, $33k ahead of where the scheduled payments alone would have gotten us, and I'm hoping I can hit $300k on Jan 1st. Not bad for a 10 month old mortgage :).

Well, we did it! My mortgage is down to $294k, vs $353k without the extra payments. We'll see how my bonus is this year, but the goal is to get under $1k in monthly interest midyear and under $200k mortgage balance at year end 2024. I think this loan has just about two years left to live, unless we get a stock market crash that calls my dollars away.

[Trifle]

Fantastically badass @grantmeaname !!  Great job!

[grantmeaname]

Thank you. It's been very motivational to have a goal that's not bouncing around from outside events far more than I can affect it.

[alcon835]

I'm a bit behind with the holidays, but y'all are AMAZING!!!!!

Congratulations @Vashy !!!! You are a rock star!!!!

Congratulations @IrishEngineer !!!! I am so excited for you!!! LETS GOOOO!!!

Congratulations @grantmeaname !!! That's some AMAZING progress!!!!

[AFrugalGuy]

Ended the year at $497,758.27. Paid off a total of $121,084.22 in principal this year (maximized annual pre-payment and increased maximum payment and payment schedule (accelerated weekly)).

Aiming to be under $400k by December 31, 2024.

[grantmeaname]

Nice work!

[Dutch Comfort]

Original: 120,000 repayment date 06/01/33
October 2021: 67,000 repayment date 12/01/32 - started the additional payments
April 2022: 60,000 repayment date 04/01/32 - HALFWAY MARK!!!!!
December 2022: EUR 53,000 repayment date 10/01/31
December 2023: EUR 41,000 repayment date 10/01/30
January 2023: EUR 39,500 repayment date 08/01/30

Goal for 2024: get to EUR 29K, repayment 10/01/29
Stretch goal: full repayment in 2027!

We did the budget for 2024 yesterday and noted that one of our savings account had a bigger balance than needed. Therefore we could do another repayment already and shaved another 2 months of the repayment date. That is a good start of the year. Goal for this year is to get the balance at EUR 29K (which is equal to doubling our mortgage payments every month).
Happy 2024 everyone!

[Trifle]

Awesome progress @Dutch Comfort !  You are laser focused.

[Money Badger]

@Dutch Comfort,  I remember the beginning of your journey and it's great progress thus far.   I predict that you will shift funds from risk-assets and trim lifestyle and liquidate other assets and cash flow as well to end this 12/31/2024 by writing a check to pay off the remainder of that balance.   It's time to end this debt and begin dramatically faster wealth creation with the cash flow you will free up.   We look forward to your freedom!

[alcon835]

Another yearly update. 2023 was messy, but not terrible. Another year of NOT paying extra on the mortgage. Originally the plan was to move in early 2024, so we were saving all that extra money for a down payment on the next house, but now we're going to take that extra savings so I can quit my job and go on a sabbatical. Anyway, still made good progress on my 15-year loan.

1/1/21 Balance:   $161,448
1/1/22 Balance:   $142,583
1/1/23 Balance:   $130,075
1/1/24 Balance:   $119,512

I think we'll still end up selling this house before we pay it off, but if 2023 taught me anything it's that plans change.

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

[Money Badger]

@alcon835,   Perhaps use that 2023 stashing for a smaller new place and rent-out the one you're in now to avoid losing that hard won equity and likely lower rate mortgage as well?   Every "sale" of a house puts you in the equity hole whatever real estate agent and other moving expenses are AND jacks up interest rates on the next place of course lately.   

Live cheaper, use that debt wisely and be on FIRE sooner (the "permanent sabbatical").    I know, this is Money Badger saying this, right ;-)?   But the relatively low balance on that loan and the sabbatical desire seems a fit for income property from what's on the table here...   Assuming at least 1% of the total value in rent each month (depending on location, condition, etc. of course) could make your new job collecting rent payments?

[Dogastrophe]

Current balance is $182K
3 yrs 1 mos left on the current term @ 5.73%
9yr 10mos amortization remaining
Weekly mortgage payments

Today is the end of the first year of our new term. We've applied an additional $2500 on the mortgage ($4K for the mortgage year) and have a couple of regular payments that we increased by 15%.

Current balance: $178
3 yrs left on current term
9yr 7mos amortization remaining

[AFrugalGuy]

December 31, 2023: $497,758.27
January 31, 2024: $463,437.96

Dropped a significant pre-payment on the mortgage this month

[alcon835]

@alcon835,   Perhaps use that 2023 stashing for a smaller new place and rent-out the one you're in now to avoid losing that hard won equity and likely lower rate mortgage as well?   Every "sale" of a house puts you in the equity hole whatever real estate agent and other moving expenses are AND jacks up interest rates on the next place of course lately.   

Live cheaper, use that debt wisely and be on FIRE sooner (the "permanent sabbatical").    I know, this is Money Badger saying this, right ;-)?   But the relatively low balance on that loan and the sabbatical desire seems a fit for income property from what's on the table here...   Assuming at least 1% of the total value in rent each month (depending on location, condition, etc. of course) could make your new job collecting rent payments?

Sorry I missed this! That was my original plan for this house - turn it into a rental. Financially...that's a pretty solid decision. I just don't know that I have the time to be a land lord. But that's definitely an option on the table depending on where life takes us in the next couple of years.

[Bartie Musa]

Bartie Musa - This thread is fascinating I am very proud of you all who are making strides in your mortgage. Quick question if your mortgage is say 2k and you did a pre-payment of 12k would that count as 6 months of payments and you wouldn't have to pay any new payments for half a year, or would it just pay down interest/principle?

[Trifle]

Bartie Musa - This thread is fascinating I am very proud of you all who are making strides in your mortgage. Quick question if your mortgage is say 2k and you did a pre-payment of 12k would that count as 6 months of payments and you wouldn't have to pay any new payments for half a year, or would it just pay down interest/principle?

As I recall, our bank allowed us to tell them how to apply the prepayment -- i.e. whether we were prepaying monthly payments (both principal and interest) or whether we wanted it all to go toward principal.  That's in the U.S..  I don't know how that works in other countries.

[grantmeaname]

Ours is the same way. You either make your next payment early, which is a mix of principal and interest and pushes out your next due date, or make an additional prepayment allocated only to principal which speeds up your paydown but does not count for months of regularly scheduled payments.

[Dutch Comfort]

Here in the Netherlands, we can choose: either do extra payments on the principal and speed up the repayment date or the extra payment is allocated to the principal and your future principal repayments will decrease (no speed up, but lower expenses every month).

[BlueHouse]

Ours is the same way. You either make your next payment early, which is a mix of principal and interest and pushes out your next due date, or make an additional prepayment allocated only to principal which speeds up your paydown but does not count for months of regularly scheduled payments.

Mine works like this:  Unless you call and tell the bank exactly how you want the money applied, they use this formula:

1.  If the extra payment is less than the full amount of a payment (your payment is >2x what you owe monthly), then they apply the extra to principal.
2.  If the extra payment is Equal to or MORE than a full monthly payment ( =>2x), then the apply the extra to a future month. 

Unwinding it afterwards always was a pain, so I kept any extra payments under the 2x amount, unless I was going in person with a recast agreement.

[innkeeper77]

Ours is the same way. You either make your next payment early, which is a mix of principal and interest and pushes out your next due date, or make an additional prepayment allocated only to principal which speeds up your paydown but does not count for months of regularly scheduled payments.

Mine works like this:  Unless you call and tell the bank exactly how you want the money applied, they use this formula:

1.  If the extra payment is less than the full amount of a payment (your payment is >2x what you owe monthly), then they apply the extra to principal.
2.  If the extra payment is Equal to or MORE than a full monthly payment ( =>2x), then the apply the extra to a future month. 

Unwinding it afterwards always was a pain, so I kept any extra payments under the 2x amount, unless I was going in person with a recast agreement.

But if the future due dates are pushed out, isn't the principal still reduced, and therefore the interest charged?

Theoretically pushed out due dates and avoiding them being pushed out result in exactly the same end result, IF you continue to make payments every month. The benefit of letting the due date get pushed out is free insurance in case something awful happens. I don't see a benefit to intentionally keeping the due date from advancing. Am I wrong?

[grantmeaname]

Your principal isn't reduced by more than the scheduled next month's principal amortization if you make an early payment rather than a principal only payment, and your interest isn't reduced at all.

If you paid the entire mortage off tomorrow using a principal only payment, the amount would be the total principal balance. if you paid it off the other way, you'd be paying the entire gross value of all of the interest and principal over the remaining life of the loan (depending on the life left in the loan, this could be more than 2x the principal amount).

[ChpBstrd]

$92,000 to go on a 3.25% 15 year mortgage with 10 years remaining.

I wonder if this thread and this site will be around in 10 years for me to celebrate here - because I'm damn sure not paying a penny early!

[iluvzbeach]

@ChpBstrd we have ~$195K and 27 years to go on a 2.375% mortgage for a house that we bought for an elderly family member to live in.  We sure as hell aren't escalating payments on that mortgage, unless or until that family member can no longer live in the home.  At that point we'll sell, but until then we love that 2.375% interest rate.

[LinneaH]

Joining, I have two loans, but need to proritize and attack one of them first, as they have very different conditions.
Loan S: balance appr $169 000, interest rate 4,84%. This is a proper mortgage loan. Interest rate will be the same for rest of 2024, and will continue on this level also coming years.
Loan M: balance appr $24 300, interest rate 4,19%. Same rate until mid-January 2025, the rate will most likely increase a lot then.

I need/want to get rid of loan M before mid-January 2025. Regular payments until then will be $1 385, meaning I need to find $22 915 extra. I do have this money saved/invested, but that's really 'other money' (travel, retirement and regular safety buffer)  and I don't want to use it, or at least use as little as possible for this.

Started by adding some petty savings
Balance is now $24 212
Need to find extra $22 826


Difference between balance and 'need to find extra' will decrease over year as there are less and less regular payments left.
My math does not always add up perfectly, as I convert from SEK at a rather arbitrary rate.

[AFrugalGuy]

December 31, 2023: $497,758.27
January 31, 2024: $463,437.96
February 28, 2024: $458,759.94

[couponvan]

December 31, 2023: $497,758.27
January 31, 2024: $463,437.96
February 28, 2024: $458,759.94

Impressive!

[AFrugalGuy]

December 31, 2023: $497,758.27
January 31, 2024: $463,437.96
February 28, 2024: $458,759.94
March 31, 2024: $454,488.73

[Freedomin5]

Joining. We bought a house in August 2023 and just paid off a $66k loan from a family member for our downpayment. We are now targeting our mortgage. We are in Canada, where our mortgage rate is only fixed for a few years (ours is fixed for 5 years), and our mortgage interest is not tax deductible. Our goal is to pay off our mortgage before the 5 years is up. Current interest is 5.5%.

Original amount: 412k
Apr 2024: 407k