Mortgage Payoff Club!!

[grantmeaname]

That's a big goal! Good luck!

Most mortgage interest in the US is not deductible either, practically speaking. It's only about 10% of taxpayers who itemize now after the Trump administration's tax changes. You'd likely have to have a big mortgage plus lots of state taxes plus another significant tax deduction for it to make sense.

[monarda]

That's a big goal! Good luck!

Most mortgage interest in the US is not deductible either, practically speaking. It's only about 10% of taxpayers who itemize now after the Trump administration's tax changes. You'd likely have to have a big mortgage plus lots of state taxes plus another significant tax deduction for it to make sense.

I itemize every other year. In even tax years, I pay a couple of extra months of mortgage payments and property taxes so it's worth itemizing.  In odd years I pay less and use the standard deduction

[monarda]

We have 3 mortgages.
Two won't be paid off for a while, (one is at 2.25%, one is at 3%)
but one... now the balance is now $49,435.

Less than 5 years to go. :-)

Almost a year later, mortgage balance for the rental is $43,515  (at 4%)
and the credit card balance we're holding is $45,917  ("0% credit cards"- balance transfer 3% for an additional 18 months, so basically 2% for year).  We'll pay both down, but not so aggressively, ... like the last couple of posts say, we will hold some in savings and stay steady paying the minimum or a bit more now and then.

Another year later, mortgage balance for the rental is $31,978
and the credit card balance is $54k, with plans to pay that down to about $40K in the next couple of months.

[Alfred J Quack]

$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!

The choice is yours to make but I paid mine off in 2018 and have been none the worse for it either.

[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 2024: EUR 39,500 repayment date 08/01/30
May 2024: EUR 36,500 repayment date 06/01/30

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

Another 2 months prepayment done! We're hoping for more prepayments this month, since we will receive the tax refund(s) and an insurance refund, which will all be directed to the mortgage!

[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 2024: EUR 39,500 repayment date 08/01/30
May 2024: EUR 36,500 repayment date 06/01/30
Another May 2024: EUR 34,500 repayment date 02/01/30

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

I just received the tax refund. Directed (and rounded to a nice round figures) EUR 2K directly to the mortgage!

[Trifle]

Nice job @Dutch Comfort! 

[lcmac32]

With my new mortgage and 6.625% interest rates, I am for the first time ever in the mortgage payoff club.  That is just about the break point for me.  7% would have been an almost absolute decision to pay extra as it will be close to the average returns in the market and the piece of mind factor that I am unloading the debt. 

I went from a 15y mtg 2.5% mtg with 9 years left to a 30y with the higher rate.  Because of the higher interest rate and the larger loan amount I decide to pay $500/month extra to principle.  I had to relocate for work, but it did come with a greater than 100% pay increase so I will bide mine time and then relocate one last time to my LCOL home state.

[grantmeaname]

Nice, congrats on the huge raise. Seems very well worth moving off a sweet mortgage for that.

[lcmac32]

Nice, congrats on the huge raise. Seems very well worth moving off a sweet mortgage for that.

Thanks!  It will be close on whether I will still hit my FIRE date (2028).  Mine will be more FI than RE, but I will have more reserve than I would have had.  I "guess" that is a good thing, but really am ready to be done sooner rather than later.  Will redefine my WHAT and WHEN my FIRE will look like at end of 2024. 

[Money Badger]

@Dutch Comfort,   Nice "chunk" taken out of that 2nd mortgage!   

[Freedomin5]

Original amount: 412k
Apr 2024: 407k
May 2024: 392k

[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 2024: EUR 39,500 repayment date 08/01/30
May 2024: EUR 36,500 repayment date 06/01/30
Another May 2024: EUR 34,500 repayment date 02/01/30
And.... another May 2024: EUR 33,500 repayment date 12/01/29

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

Received an insurance refund and rounded it up to another 2 months extra payment for our mortgage. We're getting into 2029 instead of 2030!!!! Can't imagine that we already cut off 3.5 years from our repayment date!

[Trifle]

Nice progress @Freedomin5!  Wow @Dutch Comfort, you’re getting close!  Very exciting

[Money Badger]

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

Received an insurance refund and rounded it up to another 2 months extra payment for our mortgage. We're getting into 2029 instead of 2030!!!! Can't imagine that we already cut off 3.5 years from our repayment date!

You can pay-off 29K euro now.   The lost "interest income" is meaningless in the big picture.  The ability to be happy without that debt and put monthly cash flow to work to grow (or payoff the primary mortgage!) is amazing for your health long-term both physically and fiscally.   Debt freedom leads to FIRE which leads to HAPPY.

[Dutch Comfort]

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

Received an insurance refund and rounded it up to another 2 months extra payment for our mortgage. We're getting into 2029 instead of 2030!!!! Can't imagine that we already cut off 3.5 years from our repayment date!

You can pay-off 29K euro now.   The lost "interest income" is meaningless in the big picture.  The ability to be happy without that debt and put monthly cash flow to work to grow (or payoff the primary mortgage!) is amazing for your health long-term both physically and fiscally.   Debt freedom leads to FIRE which leads to HAPPY.

I surely want to, but have to keep MrDutchComfort in mind, who feels more comfortable with more liquidity on hand and he is in the not-paying-extra-on-mortgage kamp, so this is the compromise that we settled upon. All windfalls to additional payments (with a bit of rounding up from my side) and further just the usual payments.

[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
April 30, 2024: $450,659.73

[monarda]

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

I'm pretty much on that schedule, about 30K now, and repayment in 2027.
I'll keep you company!

[Jack0Life]

I have a very cheap ARM loan that's about to reset.
Probably one of my bad decision to go with ARM loan as with this one I am able to reset this loan but it looks like high interest are here to stay.
I got locked in at 1.99% and about to jump to 3.99% this Sept. 3.99 is still cheap in this landscape so I will let it ride until next Sept 2025. If inflation doesn't die down, looks like I might have to pay off my mortgage.
Balance is $280k which I do have the money to pay off.
My special ARM is that let's say by Sept 2025, if interest go down and my bank provide my identical ARM loan at a rate I desire, I can get locked in that rate for $199. In Sept 2025 my rate will go from 3.99 to 5.99. So if my bank has my current ARM loan at a rate lower than 5.99, I can get that rate by paying $199. It's sitting at 6.69% right now.
We've been enjoying low interest rate for 25 yrs. Didn't think it would ever get this high.

[lcmac32]

Here are my first three entries.  I would like to be more aggressive in my payoff, but it won't ramp up until the end of 2024.  Two weddings and a house remodel will have me replenishing a lot of my liquid capital.  I still plan on averaging over $500.00/mo. in additional principle.

Original Loan Amt $484,000.00 

March $483,072.97 ($500.00 add. principle)
April $482,140.83 ($500.00 add. principle)
May $481,703.54 (0.00 add. principle)

[grantmeaname]

Every little bit helps. Do you have a spreadsheet that shows you how each extra $500 pulls in the payoff date?

[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
April 30, 2024: $450,659.73
May 31, 2024: $445,958.51 (not counting a few extra hundred dollars of emergency fund interest I will throw at this tomorrow)

[Nederstash]

Thoughts welcome, mostly typing this to put down my thoughts! I've been flitting all over the place with my money, trying to do everything at once. I was watching some Dave Ramsey (don't judge, he has a practical wisdom I enjoy) and he mentioned that people don't reach their goals because they can't focus. That hit home, because I have been trying to do it all and feeling like I'm falling flat on every aspect!

My situation:
Savings:
12k emergency fund (done)
10k for a new car (done)
12,250 for a big renovation I'm planning (goal 40k)

Investments:
50k, including 12k earmarked for nieces and nephews when they turn 18. So really 38k.

Home:
132k left on the mortgage. Home value around 500k.

I'm thinking of selling off the 38k in investments. The market is the highest I've ever seen it and I want to do the renovation within the next 6ish months anyway. That's 28k of the 38k.

My next major goal is paying off the mortgage. I could use the 10k investments for that AND half my emergency fund. Reasons for halving my EF: I have a steady paid job with full sick leave/unemployment benefits/pensions etc (Netherlands). I have money saved up for the house reno and a car. My monthly expenses are around 2k, so 6k is a three month emergency fund.

I guess I'm just very nervous about spending SO MUCH money when I've worked so hard to make this money grow for the last few years. I've been paying off some of my mortgage, then switching to investing, then switching to saving for the car and the home reno. I really wish to simplify and hopefully pay off my mortgage ASAP. Then I'll get back into investing.

Paying off 16k would take the mortgage down to 116k. After that, I can put about 16k a year towards the principal on top of my normal payments and I should be done in 5 years. Probably a bit faster as my interest will get lower as I pay more off.

Feels like a wild and big plan... gotta let this simmer a bit.

[lcmac32]

Original Loan Amt $484,000.00

Mar 24  $483,072.97 ($500.00 add. principle)
Apr 24  $482,140.83 ($500.00 add. principle)
May 24 $481,703.54 (0.00 add. principle)
Jun 24  $481,112.22 ($151.61 add. principle)

[Dutch Comfort]

Thoughts welcome, mostly typing this to put down my thoughts! I've been flitting all over the place with my money, trying to do everything at once. I was watching some Dave Ramsey (don't judge, he has a practical wisdom I enjoy) and he mentioned that people don't reach their goals because they can't focus. That hit home, because I have been trying to do it all and feeling like I'm falling flat on every aspect!

My situation:
Savings:
12k emergency fund (done)
10k for a new car (done)
12,250 for a big renovation I'm planning (goal 40k)

Investments:
50k, including 12k earmarked for nieces and nephews when they turn 18. So really 38k.

Home:
132k left on the mortgage. Home value around 500k.

I'm thinking of selling off the 38k in investments. The market is the highest I've ever seen it and I want to do the renovation within the next 6ish months anyway. That's 28k of the 38k.

My next major goal is paying off the mortgage. I could use the 10k investments for that AND half my emergency fund. Reasons for halving my EF: I have a steady paid job with full sick leave/unemployment benefits/pensions etc (Netherlands). I have money saved up for the house reno and a car. My monthly expenses are around 2k, so 6k is a three month emergency fund.

I guess I'm just very nervous about spending SO MUCH money when I've worked so hard to make this money grow for the last few years. I've been paying off some of my mortgage, then switching to investing, then switching to saving for the car and the home reno. I really wish to simplify and hopefully pay off my mortgage ASAP. Then I'll get back into investing.

Paying off 16k would take the mortgage down to 116k. After that, I can put about 16k a year towards the principal on top of my normal payments and I should be done in 5 years. Probably a bit faster as my interest will get lower as I pay more off.

Feels like a wild and big plan... gotta let this simmer a bit.

As fellow Dutchie, I'm giving you my 2Cents on your plan (just know that I am very conservative and I'm having safety cushions everywhere):

First, it is good to focus on 1 item alone. I'm not sure on the interest rate on your mortgage, but if it is below 3%, just leave it for now. Also, leave your investments where they are (safety cushion!) and do not add.
First of all, if you're planning a renovation on your house, make sure you can pay in cash. So I would first start saving towards the 40K needed on the reno (goal number 1), not add to investments, only pay minimum mortgage, just put everything towards that.
As soon as reno is finished, start paying down the mortgage (goal number 2). Since you will have a safety net with your EF, new car fund and investments (total is around appr. 1 year of spending, I suppose), you can put everything towards the mortgage at that time. After the mortgage is paid off, just start investing again.

As said, just my 2Cents.....

[lcmac32]

Dutch Comfort -  My first thought is you are doing fine.  Don't panic.  If the desire to do the renovation is the most important, then just focus on saving for that.  No add. principle payment to mortgage, no more EF savings, no investment savings. 

We just completed a massive six figure level remodel, and as a saver I hated to spend the money, but the home is basically exactly how we/DW wanted it to be.  DW puts more store in how the home looks than I do, but I recognize that there are many returns on having the house/home be that nice.  YOLO* and half of your life time will be in that spot so making it like you want it is a worthy and worthwhile goal. 

*Mustachians rarely suffer big YOLO issues from a spending perspective, but can occasionally become too FIRE focused to take time to enjoy the fantastic time in history we all live.

[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
April 30, 2024: $450,659.73
May 31, 2024: $445,958.51
June 30, 2024: $442,023.07 (not counting a few extra hundred dollars of emergency fund interest I will throw at this tomorrow)

[iluvzbeach]

I almost let the month slip by without remembering it was 7 years ago earlier this month that we paid off the mortgage on our primary home. We haven’t questioned that decision one tiny bit.

We have a less than $200K mortgage on a secondary home that a close, elderly family member lives in but with a rate of 2.375% we don’t look to accelerate payoff on it.

[lcmac32]

Original Loan Amt $484,000.00

Mar 24  $483,072.97 ($500.00 add. principal)
Apr 24  $482,140.83 ($500.00 add. principal)
May 24 $481,703.54 (0.00 add. principal)
Jun 24  $481,112.22 ($151.61 add. principal)
Jul 24   $480,517.64 ($151.61 add. principal)

[VanillaGorilla]

I paid off my mortgage a few weeks go and it doesn't feel satisfying. Since I'm still on the hook for taxes and insurance, it's just a change to my monthly bill. 

What feels a lot more satisfying is having a large brokerage account balance.

I regret paying down my loan during a period of low interest rates. If I could go back I'd lock in a 30 year fixed rate loan at 3% and never touch it.

Live and learn.

[grantmeaname]

You could pay both only twice a year, if that would help it feel a little better.

I graduated school in 2015 and went to rent in a VHCOL city to start my career. Sometimes I think about what if I had stayed put, bought a house for a 2.2% mortgage, and then rode the >100% appreciation over the last decade. But I had a good decade full of great career moves and personal growth, so I can't be too sad about it.

[lcmac32]

I paid off my mortgage a few weeks go and it doesn't feel satisfying. Since I'm still on the hook for taxes and insurance, it's just a change to my monthly bill. 

What feels a lot more satisfying is having a large brokerage account balance.

I regret paying down my loan during a period of low interest rates. If I could go back I'd lock in a 30 year fixed rate loan at 3% and never touch it.

Live and learn.

I 100% understand where you are coming from.  I left a 15 year mtg with 2.5% rate, for a job that 2x'd my pay, but came with a house and remodel price tag in addition to a 6.675% mtg rate.  I have some remorse over that, and am in the payoff early club b/c of the high interest rate.  This stems from concerns on DW paying it on her own should the untimely come sooner for me.  If however, rates got back down to 3%, I would be back in the don't payoff the mtg club. 

On the flip side, I am going to move to a LCOLA when I fire.  I will also downsize to my own custom build home which will be significantly smaller.  It will have much lower taxes and insurance.  The McMansion fallacy needs to die a quick death.  Smaller, but high quality and efficiency are my dream.

[grantmeaname]

You don't have term life insurance? If I kick it my wife is free as a bird as soon as the payment comes through.

[lcmac32]

You don't have term life insurance? If I kick it my wife is free as a bird as soon as the payment comes through.

I do have term life.  I have the max amount I can get without a physical.  It would not completely satisfy the outstanding mortgage.  Should have enough liquid to cover the rest by EOY 2025.  Of course, I could just get the physical and up the term life amount.  If I pushed it to $1,000,000.00 she would be free as a bird too!

[lcmac32]

Nice, congrats on the huge raise. Seems very well worth moving off a sweet mortgage for that.

Thanks!  It will be close on whether I will still hit my FIRE date (2028).  Mine will be more FI than RE, but I will have more reserve than I would have had.  I "guess" that is a good thing, but really am ready to be done sooner rather than later.  Will redefine my WHAT and WHEN my FIRE will look like at end of 2024.

I just put my FIRE date out to 2030 cohort.  I am slowly getting things dialed in. 

[grantmeaname]

I understand. Wasn't meant to be a judgemental comment. At my work you can get up to 6x annual salary without a physical, incredible incredible amounts, but of course not everywhere is set up that way. I'm sure the employer picks on a sliding scale what premiums they are willing to incur vs what convenience for their employees they want to provide.

[Freedomin5]

Original amount: 412k
Apr 2024: 407k
May 2024: 392k
Jun 2024: 377k
Jul 2024: 338k

[grantmeaname]

Huge month! Nice work.

[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
April 30, 2024: $450,659.73
May 31, 2024: $445,958.51
June 30, 2024: $441,843.89
July 31, 2024: $437,899.61

[Trifle]

December 31, 2023: $497,758.27
January 31, 2024: $463,437.96
February 28, 2024: $458,759.94
March 31, 2024: $454,488.73
April 30, 2024: $450,659.73
May 31, 2024: $445,958.51
June 30, 2024: $441,843.89
July 31, 2024: $438,119.79 (not counting the application of a few extra hundred dollars of emergency fund interest at end of month)

Nice progress @AFrugalGuy!  Do you have a particular goal for the end of the year?  Looks like you might be within striking distance of getting under 400 by then?   

[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
April 30, 2024: $450,659.73
May 31, 2024: $445,958.51
June 30, 2024: $441,843.89
July 31, 2024: $438,119.79 (not counting the application of a few extra hundred dollars of emergency fund interest at end of month)

Nice progress @AFrugalGuy!  Do you have a particular goal for the end of the year?  Looks like you might be within striking distance of getting under 400 by then?

Thank you! I am estimating $405,451.11 - we shall see!

[oldtoyota]

We have five more payments left, and I'm happy about that! Seeing the plan come to fruition is satisfying.

The mortgage company is sending us mail about how we can get a NEW loan at a "new" rate, which I'm sure is much higher than we had before. Um, no thanks!

[monarda]

We have 3 mortgages.
Two won't be paid off for a while, (one is at 2.25%, one is at 3%)
but one... now the balance is now $49,435.

Less than 5 years to go. :-)

Almost a year later, mortgage balance for the rental is $43,515  (at 4%)
and the credit card balance we're holding is $45,917  ("0% credit cards"- balance transfer 3% for an additional 18 months, so basically 2% for year).  We'll pay both down, but not so aggressively, ... like the last couple of posts say, we will hold some in savings and stay steady paying the minimum or a bit more now and then.

Another year later, mortgage balance for the rental is $31,978
and the credit card balance is $54k, with plans to pay that down to about $40K in the next couple of months.

$28,803 mortgage balance. I can taste the end.

Credit card balance is $28,200.  Savings accounts were drained down to pay off those CCs, but it'll feel so good to get rid of that balance.  I also have 20K on a 0% HELOC for a few months, but we should be able to pay that off by the end of the year when the 0% promo ends.

[RobertFromTX]

Paid off my mortgage today!!!

I've never been more happy. (regarding a financial milestone)

5 / 2017:
     Purchased modest home for $167,000 with 10% down.
2017-2022:
     Non-aggressively paid down about $10k/yr as I built up my 100% equities portfolio.
1 / 2023: 
     Reached a portfolio level that would give a modest FI life.
2023-Today:
     Aggressively paid the mortgage down from $104,000 to $0, while still maxing all retirement contributions.

[couponvan]

Congratulations @RobertFromTX! Must be a great feeling.

[Trifle]

Fantastic job @RobertFromTX !!  Huge congratulations. 

What’s next for you?  Coast along a bit building the stash?  Quitting the job?

[RobertFromTX]

Fantastic job @RobertFromTX !!  Huge congratulations. 

What’s next for you?  Coast along a bit building the stash?  Quitting the job?

So I had my financial awakening in 2018 (after I bought the house). At the time I had a long commute to a good, but dead-end for me, job. I didn't know how or what or why, but I knew I couldn't sustain it any longer.

But since 2019, I've been working remotely in a new career that I find enjoyable. I have all the freedom I need and am making even more money than my supposedly "good job" I had before.

So no plans to quit my current work, but can walk away if necessary. I do plan to *try* to spend up to an amount that represents 4% of my portfolio from my work income and then save the remainder (further increasing what that 4% is). Not to buy more crap, but I like mountain adventures and long-distance hiking and that does take some funds to do on a regular basis.

[lcmac32]

@RobertFromTX -  I think you have created the dream.  If my children weren't all in my current state, I would totally be doing what you have done.  I could certainly lean FIRE right now if I sold current home and went to LCOLA (my home state).  Glad to see someone has proven it. 

Now back to mtg payoff numbers:

Original Loan Amt $484,000.00

Mar 24  $483,072.97 ($500.00 add. principal)
Apr 24  $482,140.83 ($500.00 add. principal)
May 24 $481,703.54 (0.00 add. principal)
Jun 24  $481,112.22 ($151.61 add. principal)
Jul 24   $480,517.64 ($151.61 add. principal)
Aug 24 $479,919.78 ($151.61 add. principal) 

I was happy to pull down under $480,000.  I also like seeing the normal principal amount going up.  I want to get ramped back up to the $500/mo.  just to see how quickly I will be reduce the outstanding balance by $1,000/month. 

[oldtoyota]

Paid off my mortgage today!!!

I've never been more happy. (regarding a financial milestone)

5 / 2017:
     Purchased modest home for $167,000 with 10% down.
2017-2022:
     Non-aggressively paid down about $10k/yr as I built up my 100% equities portfolio.
1 / 2023: 
     Reached a portfolio level that would give a modest FI life.
2023-Today:
     Aggressively paid the mortgage down from $104,000 to $0, while still maxing all retirement contributions.

What great news! Congratulations!!

[Money Badger]

I paid off my mortgage a few weeks go and it doesn't feel satisfying. Since I'm still on the hook for taxes and insurance, it's just a change to my monthly bill. 

What feels a lot more satisfying is having a large brokerage account balance.

I regret paying down my loan during a period of low interest rates. If I could go back I'd lock in a 30 year fixed rate loan at 3% and never touch it.

Live and learn.

Great milestone, congrats!  But indeed mortgage post-partum happens to some.   No one pats you on the back for the work it took.   To feel much better, now run the TMV spreadsheet to see how quickly your newly freed cash flow will grow to a balance that then generates monthly cash to pay the insurance, taxes and utilities.  That is key to reach FI.   Being paid to live in a free and clear home in total financial comfort is a VERY happy feeling!  And the good options
in your life and investment compounding snowball just get better from there.