Author Topic: Do you regret paying off your mortgage early?  (Read 98076 times)

effigy98

  • Stubble
  • **
  • Posts: 196
Re: Do you regret paying off your mortgage early?
« Reply #350 on: January 27, 2016, 02:28:21 PM »
I was not aware there was a way to exclude investment income from showing up as income for the sake of benefits.

It's not that investment income doesn't count as income; it's that, when you sell investment assets to generate cash to fund the required mortgage payments, only the capital gains (plus any dividends you receive) count as income (and any unrealized capital gains do not count as income unless and until you do realize them).  For that reason, the cash flow requirements of carrying a mortgage do not translate into a need for additional income on a dollar-for-dollar basis.  In the early years of a leveraged-investing-via-mortgage plan, when your cost basis in the investments is still high, your income may not be materially higher than it would've been had you paid off the mortgage.  Over time, as your cost basis in the portfolio drifts down, your relative income will drift up.

I see so my situation is probably different then the general theme. I plan on ER on my Roth 401k and draw 25k a year from it (or whatever the SWR is and keeps me below subsidy thresholds for things like ACA). My understanding this is counted as income using the 5 year rolling roth.

brooklynguy

  • Handlebar Stache
  • *****
  • Posts: 2125
  • Age: 37
Re: Do you regret paying off your mortgage early?
« Reply #351 on: January 27, 2016, 02:52:02 PM »
I see so my situation is probably different then the general theme. I plan on ER on my Roth 401k and draw 25k a year from it (or whatever the SWR is and keeps me below subsidy thresholds for things like ACA). My understanding this is counted as income using the 5 year rolling roth.

But where are the funds that you would potentially use to pay off your mortgage coming from?  Would you be diverting funds that would otherwise go into a tax-advantaged account towards prepaying your mortgage?  If so, sacrificing those tax-advantages creates an additional hurdle that the "prepay alternative" needs to clear in order to come out ahead.

BlueHouse

  • Magnum Stache
  • ******
  • Posts: 2585
  • Location: WDC
Re: Do you regret paying off your mortgage early?
« Reply #352 on: January 28, 2016, 12:27:20 PM »
Quote
... However, it is mathematically better if the money is in the stock market. 

In know this is semantics, but is it "mathematically better" or is it statistically better, based on historical trends of long-term diversified investments? 
I mean, it wouldn't be better if I had put all of my money into VTSAX in July 2015 if I need the money now, in January 2016, would it? 

The phrasing just irks me because it turns a statistically likely outcome into a blanket statement. 
Sometimes nothing can be a real cool hand

dragoncar

  • Walrus Stache
  • *******
  • Posts: 7395
  • Registered member
Re: Do you regret paying off your mortgage early?
« Reply #353 on: January 28, 2016, 02:02:57 PM »
Quote
... However, it is mathematically better if the money is in the stock market. 

In know this is semantics, but is it "mathematically better" or is it statistically better, based on historical trends of long-term diversified investments? 
I mean, it wouldn't be better if I had put all of my money into VTSAX in July 2015 if I need the money now, in January 2016, would it? 

The phrasing just irks me because it turns a statistically likely outcome into a blanket statement.

Well statistics is a branch of mathematics, so your statement is really just an accurate clarification

GuitarStv

  • Walrus Stache
  • *******
  • Posts: 9508
  • Age: 36
  • Location: Toronto, Ontario, Canada
Re: Do you regret paying off your mortgage early?
« Reply #354 on: January 29, 2016, 06:10:47 AM »
Mebbe not.

Statistically it's more likely that investing is better.  Mathematically you can add up the values of (statistically unlikely) scenarios that can occur where paying off your house is a better thing to do.

Jack

  • Magnum Stache
  • ******
  • Posts: 4745
  • Location: Atlanta, GA
Re: Do you regret paying off your mortgage early?
« Reply #355 on: January 29, 2016, 11:26:18 AM »
I am really surprised nobody is talking about the handouts of the government for low income folks. By reducing your outgoing monthly payments, you are lowering your income requirements. If you FI or get layed off, you have a lot more help to stay FI'ed or continue unemployment until you actually find a job you like (more choices) rather than running out and getting a soul sucking, dilbert job that you hate.

I am unaware of anyone making this argument. The assumption is if you aren't paying your house off, you are saving/investing the difference.

It's not a "spend extra money vs pay off mortgage early" question, in which case you are 100% correct and you should always pay it off. The question is whether it is on the whole a positive to your net worth to pay a mortgage off early, instead of investing the additional money instead.

In terms of this discussion, the point (I think) is along these lines:
Two scenarios:
1) you are FIREd and have paid off your mortage; you have a smaller stash and a lower spending
2) you are FIREd and continue to carry your mortgage; you have a larger stash and higher spending

You have to generate income to meet your spending, say by incurring capital gains or interest income.
In scenario two, you have to generate more income from your investments. It's possible that income could disqualify you from income (not wealth) tested benefits that might otherwise be available in scenario one.

Even if you did want to qualify for low-income benefits in FIRE, investing and making minimum mortgage payments until your FIRE date and then liquidating the investments to pay off your mortgage in a lump sum is, on average, going to be better than paying it down ASAP.

pdxmonkey

  • Bristles
  • ***
  • Posts: 262
Re: Do you regret paying off your mortgage early?
« Reply #356 on: January 29, 2016, 10:40:21 PM »
Some food for thought from Kitces: Why Is It Risky To Buy Stocks On Margin But Prudent To Buy Them "On Mortgage"?

My assets, including IRA and 401k are allocated in a high beta manner. All equities. My house is serving as my low risk investment.

It might be time to rebalance by paying the mortgage a bit slower as home prices have rebounded here in Portland (once again at all time highs) and my home value is now something like 50-55% of my net worth. On the other hand 55% of my "savings" monthly is going into equities and 45% is going into the mortgage so it's tilted slightly in favor of rebalancing to equities as is and I really want it paid off.

Lmoot

  • Bristles
  • ***
  • Posts: 410
Re: Do you regret paying off your mortgage early?
« Reply #357 on: January 30, 2016, 05:04:12 AM »
I wish people wouldn't have the sentiment, "It's the mathematically incorrect thing to do, but it makes us feel better."

It's not mathematically incorrect. It is a choice. You're trading higher expected returns (based on historical performance) for lower volatility.

And this is a choice that pretty much everyone makes on some level. Even the mathematics of mortgages master race does this as they aren't likely refinancing the outstanding balance of their loan into a fresh 30 year mortgage at every possible opportunity.

I probably posted this earlier, but there is a lot you could be doing in order to leverage debt into capital investments. Most people draw the line at a certain point though. My line was drawn at maxing out the 401k and IRA. Time to throw money at the mortgage until I come up with something better.

Well said. To add to this (and to agree with an earlier poster), many people who choose to pay their mortgage off early may not have been as gungho to throw that much money at stocks (even index). In that case emotion/ motivation does have a real mathematical impact. We are biological not robotic, and even though emotion gets a bad rap in PF, sometimes emotion drive us to make better decisions...sometimes more so than logic. As someone earlier mentioned, logic dictates if we live in some shack with multiple roommates, we can save more money. However we may not be motivated to do so for very long and that's when logic stops at the edge of the paper. Some people are more wired one way or another and that's why it doesn't make sense to tell someone (who you don't know) that it's better for THEM to put their money into something else (especially when often times there's only a nominal difference in outcome between the two...and rarely consistent and never 100% predictable) and assuming because it might work out on paper that it will play out so in real life. It's one thing to lay out the facts and say you prefer one method, and another to try and convince or belittle someone into believing that one is the more correct option. Even when we all have the facts, it's still up to us individually to decide which is better for us.

30 years is a long time....even if that is the standard mortgage term. 1 pound of feathers = 1 pound of lead and 30 years is still over a 1/3 of the average human lifespan. So for me, 30 years is a long spread to determine that historically something is "worth it". I admit I am fickle-minded and I tend to go on spurts of wanting to invest in this or that, or start my own business, and it's that aspect of my personality that makes me hesitant to invest in something that I might need to ride out for possibly years, or lose money if the timing of the market doesn't coincide with the timing of my whims.

For me it's more than feeding my emotions. It's about control. I don't disagree that historically investing in the stock market is a good thing. I do have a ROTH, IRA and a 401k, but for now and in the long-term future, that's all I see myself investing in market-wise. I think index funds are great for the long-term view, for someone with steady and conventional employment, who doesn't expect to need intermittent access to large amounts of capital before they retire.

Also, the original poster simply asked if folks regret paying OFF the mortgage...so why does almost every dissenting reply assume everyone pays it down with an extra $1 per principal per month? Or that we all have $500k houses? I made my first mortgage prepay in December (6 years into a 30 year loan), and have already reduced it by $10k, with about $45k to go and plan to have it paid off in 18 months from the first prepay, to pay off. I'll be 32/33 when it's paid off and will have plenty of years of investing ahead of me should I change my mind. We all have different goals in life. I prefer to invest in real estate but don't earn much money. Paying off my modest mortgage is the only way to get my DTI ratio low enough that I can qualify for a decent 2nd property to rent out. Sure I could apply that to a higher DP on the 2nd property, but then I would have 2 mortgages and therefore 2 liabilities. Sure I could put it in the market, but I'm not throwing $50k in 18 months into the market, when I know I will need access to every cent of that $50k in 3 years or less...and every 3-5 years thereafter until an undetermined date.

You all don't know people's circumstances. Rarely do people who pay off their mortgage accuse, or even think of traditional investors as silly simpletons...however that seems to be the common sentiment against those who choose to pay off their mortgage early, without knowing their story. One equation (no matter how steady or accurate) does not solve every problem and if you think it does, then you are incorrect.

I wanted to add...some people are not seeking "the most". Some people find that idiotic, and that's sad. I am a mindful, calculating (for good, not evil), intelligent person, and while I don't have all of the answers, I live my life purposefully and try to only engage in things (financially especially) that support that vision.
« Last Edit: January 30, 2016, 05:25:22 AM by Lmoot »

Liquid

  • 5 O'Clock Shadow
  • *
  • Posts: 13
Re: Do you regret paying off your mortgage early?
« Reply #358 on: November 28, 2017, 08:02:59 AM »
I will just leave this here as ERN explained implicit rent much better than I was able to.

https://earlyretirementnow.com/2017/11/15/that-house-over-there-is-an-investment/

Imma

  • Bristles
  • ***
  • Posts: 445
  • Location: Europe
Re: Do you regret paying off your mortgage early?
« Reply #359 on: November 28, 2017, 08:41:01 AM »
To each his own but what that does not factor in is the fact that while you earn interest you are paying compound interest and incurring a ton of risk.

What does this even mean?  The interest you pay on your mortgage compounds while the earnings on your investments somehow don't?

The "ton of risk" you are incurring when you assume that your investments will outperform your 30-year low-interest-rate mortgage is much lower than the "ton of risk" you are incurring when you assume that you can retire on a stash equal to 25x your expenses.  If investing in lieu of prepaying a sub-4%, 30-year mortgage really involves a "ton of risk," then anyone relying on the 4% rule is in a shitload of trouble.

My mortgage is still outstanding but I regret having started down the road of aggressively prepaying principal before reversing course and keeping every last penny of cheap borrowed money outstanding for as long as possible.  I still have ~25 years of amortization left, but if I had substantially less years to maturity I would happily refinance back into a 30 year and pull out the maximum amount of equity.

For the average person not paying off the mortgage can be a huge risk.

Say you earn 3000 and your mortgage is 1000 (in my country, this is an average income and an average mortgage payment). Every time you make an extra payment, your monthly mortgage payment gets lower. Say you overpay 200 every month and at some point your remaining mortgage payment is 750. Say the economy turns bad and you lose your job. You find a new job and your income is now 2250. You have no problems paying your mortgage every month, even though you took a pay cut, because you paid off part of your mortgage early.

If you're earning 3000, your mortgage is 1000 and you're not overpaying 200/month but investing that. The economy turns bad, you lose your job. Your income is now 2250 and the mortgage payment still 1000. For the average person this will be very hard. Of course, you have some money invested, but if the stock market is down, you might have to sell it at a big loss. This is risky.

If you're mustachian and your mortgage is low, you have a very good job and a massive stash, paying off a mortgage is not important. But for the average person it's probably a sensible thing to do.

keyvaluepair

  • 5 O'Clock Shadow
  • *
  • Posts: 86
  • Age: 53
  • Location: Pacific Northwest
Re: Do you regret paying off your mortgage early?
« Reply #360 on: November 28, 2017, 09:09:13 AM »
No regrets. Paid of the house 14 years ago and it has helped me be more aggressive in my investing and in taking significant career risk - which did quite well.

brooklynguy

  • Handlebar Stache
  • *****
  • Posts: 2125
  • Age: 37
Re: Do you regret paying off your mortgage early?
« Reply #361 on: November 28, 2017, 09:21:45 AM »
Every time you make an extra payment, your monthly mortgage payment gets lower.

In the U.S., making principal prepayments on a standard 30-year fixed-rate mortgage loan does not reduce the required monthly payment amount.  The loan is set up to fully amortize over 30 years, and prepayments have the effect of shortening the maturity, not reducing the required scheduled monthly payments.

And other features of the standard 30-year mortgage loan in the U.S., which mortage loans in your country may not share--namely, (i) a long-term maturity period, (ii) a low interest rate, (iii) a fixed interest rate, and (iv) non-callability by the lender (not to mention potential tax-deductibility of interest and the potential non-recourse nature of the loan)--are the key factors that make it so well-suited for use as a vehicle for leveraged-investing.

boarder42

  • Walrus Stache
  • *******
  • Posts: 6077
Re: Do you regret paying off your mortgage early?
« Reply #362 on: November 28, 2017, 09:24:07 AM »
To each his own but what that does not factor in is the fact that while you earn interest you are paying compound interest and incurring a ton of risk.

What does this even mean?  The interest you pay on your mortgage compounds while the earnings on your investments somehow don't?

The "ton of risk" you are incurring when you assume that your investments will outperform your 30-year low-interest-rate mortgage is much lower than the "ton of risk" you are incurring when you assume that you can retire on a stash equal to 25x your expenses.  If investing in lieu of prepaying a sub-4%, 30-year mortgage really involves a "ton of risk," then anyone relying on the 4% rule is in a shitload of trouble.

My mortgage is still outstanding but I regret having started down the road of aggressively prepaying principal before reversing course and keeping every last penny of cheap borrowed money outstanding for as long as possible.  I still have ~25 years of amortization left, but if I had substantially less years to maturity I would happily refinance back into a 30 year and pull out the maximum amount of equity.

For the average person not paying off the mortgage can be a huge risk.

Say you earn 3000 and your mortgage is 1000 (in my country, this is an average income and an average mortgage payment). Every time you make an extra payment, your monthly mortgage payment gets lower. Say you overpay 200 every month and at some point your remaining mortgage payment is 750. Say the economy turns bad and you lose your job. You find a new job and your income is now 2250. You have no problems paying your mortgage every month, even though you took a pay cut, because you paid off part of your mortgage early.

If you're earning 3000, your mortgage is 1000 and you're not overpaying 200/month but investing that. The economy turns bad, you lose your job. Your income is now 2250 and the mortgage payment still 1000. For the average person this will be very hard. Of course, you have some money invested, but if the stock market is down, you might have to sell it at a big loss. This is risky.

If you're mustachian and your mortgage is low, you have a very good job and a massive stash, paying off a mortgage is not important. But for the average person it's probably a sensible thing to do.

first in the US paying down a mortgage doesnt lower your payments unless you ask for a recast - i would assume this to be true in most countries.

second for that reason above paying down a low fixed rate mortgage over time increases your risk of finincial failure in the situation you describe where you lose a job.  you have less capital now if you had been pumping it into a mortgage than the market - if you've paid an extra 50k on a 200k mortgage and i invested that 50k in the market and lets assume there was no gain on it at all which is unlikley but it crashes by 40% i still have 30k more dollars available to keep paying my mortgage while i find a job. 

so if the average person is actually investing the difference they are infact in a better place than the others who may be paying down their mortgage specifically b/c they dont have a lot of other savings b/c they arent mustachian.
My Miles Journal -Learn to Manufacture spend(MS)

Best super bonuses on Credit cards right now

1. Delta Gold 60k miles Ends 1/31/2018
2. Delta Platinum - 70k miles - Ends 1/31/2018

Delta Business Gold - Ends 1/31/2018

Join Personal Capital - We each get 20 bucks!!
 https://www.talkable.com/x/StjGrn

CU Tiger

  • Bristles
  • ***
  • Posts: 429
  • Location: Mid-Atlantic USA
Re: Do you regret paying off your mortgage early?
« Reply #363 on: November 28, 2017, 09:42:06 PM »
We paid our mortgage off several years early, while also investing. Best thing ever for peace of mind, and we are doing very well financially. Never regretted paying it off.

The original question was asking if those who paid off their mortgage regretted it. What about that sets off a flood of people insisting that early mortgage payers are dim bulbs who don't understand math and other things that make mortgage holders smarter, better looking, and all-around better people?
There are two ways to get enough: one is to continue to accumulate more and more. The other is to desire less. - G.K. Chesterton

Imma

  • Bristles
  • ***
  • Posts: 445
  • Location: Europe
Re: Do you regret paying off your mortgage early?
« Reply #364 on: November 29, 2017, 03:24:50 AM »
To each his own but what that does not factor in is the fact that while you earn interest you are paying compound interest and incurring a ton of risk.

What does this even mean?  The interest you pay on your mortgage compounds while the earnings on your investments somehow don't?

The "ton of risk" you are incurring when you assume that your investments will outperform your 30-year low-interest-rate mortgage is much lower than the "ton of risk" you are incurring when you assume that you can retire on a stash equal to 25x your expenses.  If investing in lieu of prepaying a sub-4%, 30-year mortgage really involves a "ton of risk," then anyone relying on the 4% rule is in a shitload of trouble.

My mortgage is still outstanding but I regret having started down the road of aggressively prepaying principal before reversing course and keeping every last penny of cheap borrowed money outstanding for as long as possible.  I still have ~25 years of amortization left, but if I had substantially less years to maturity I would happily refinance back into a 30 year and pull out the maximum amount of equity.

For the average person not paying off the mortgage can be a huge risk.

Say you earn 3000 and your mortgage is 1000 (in my country, this is an average income and an average mortgage payment). Every time you make an extra payment, your monthly mortgage payment gets lower. Say you overpay 200 every month and at some point your remaining mortgage payment is 750. Say the economy turns bad and you lose your job. You find a new job and your income is now 2250. You have no problems paying your mortgage every month, even though you took a pay cut, because you paid off part of your mortgage early.

If you're earning 3000, your mortgage is 1000 and you're not overpaying 200/month but investing that. The economy turns bad, you lose your job. Your income is now 2250 and the mortgage payment still 1000. For the average person this will be very hard. Of course, you have some money invested, but if the stock market is down, you might have to sell it at a big loss. This is risky.

If you're mustachian and your mortgage is low, you have a very good job and a massive stash, paying off a mortgage is not important. But for the average person it's probably a sensible thing to do.

first in the US paying down a mortgage doesnt lower your payments unless you ask for a recast - i would assume this to be true in most countries.

second for that reason above paying down a low fixed rate mortgage over time increases your risk of finincial failure in the situation you describe where you lose a job.  you have less capital now if you had been pumping it into a mortgage than the market - if you've paid an extra 50k on a 200k mortgage and i invested that 50k in the market and lets assume there was no gain on it at all which is unlikley but it crashes by 40% i still have 30k more dollars available to keep paying my mortgage while i find a job. 

so if the average person is actually investing the difference they are infact in a better place than the others who may be paying down their mortgage specifically b/c they dont have a lot of other savings b/c they arent mustachian.

I don't really know how mortgages work in other countries, honestly. This is how it happens in my country. You can ask for the loan term to be shortened, but not every mortgage lender allows that. Standard mortgage is 30 years, usually fixed (currently very low, 1,75%) interest for the first 10 years, interest is deductible. Most mortgages start off at 100-105% of the value of the property.

I think to get from a 1000 to a 750/month payment you're indeed looking at a sum of about 50.000 that's either paid off or invested. If we're talking about a serious economic crisis like 2008, I think it's absolutely not unthinkable that investments lose 40% in value. My country's index lost about 60% between 2007 and 2009. The average person has never heard of niche things like index funds and low cost brokers. He will probably have an account with a high street bank and follow their investment advice and might lose a lot more than 60%. On top of that in this country he has to pay 1,2% of the value of his investments in wealth taxes every year (but not for the value of his main home) but I know that doesn't apply in the US.

Now, I'm not saying investing is a bad choice at all. I'm investing a large part of my income every month and mathematically, it's the best choice - if you're making sensible choices. But unless you know what you're doing, investing is risky and over the past couple of decades it seems that any investing product sold on a large scale to consumers has turned out to be a scam. I know many average people who lost their life savings in scams like these. And most people don't know anything about hidden costs and low cost brokers. High street banks may take 3-5% of the value of your portfolio in hidden costs on a yearly basis. For a mustachian, or someone with a real interest in investing, of course investing is better. But if you're an average person, no interest or knowledge at all in economics or investing, paying off a mortgage is generally a much better option.

keyvaluepair

  • 5 O'Clock Shadow
  • *
  • Posts: 86
  • Age: 53
  • Location: Pacific Northwest
Re: Do you regret paying off your mortgage early?
« Reply #365 on: November 29, 2017, 06:41:08 AM »
To each his own but what that does not factor in is the fact that while you earn interest you are paying compound interest and incurring a ton of risk.

What does this even mean?  The interest you pay on your mortgage compounds while the earnings on your investments somehow don't?

The "ton of risk" you are incurring when you assume that your investments will outperform your 30-year low-interest-rate mortgage is much lower than the "ton of risk" you are incurring when you assume that you can retire on a stash equal to 25x your expenses.  If investing in lieu of prepaying a sub-4%, 30-year mortgage really involves a "ton of risk," then anyone relying on the 4% rule is in a shitload of trouble.

My mortgage is still outstanding but I regret having started down the road of aggressively prepaying principal before reversing course and keeping every last penny of cheap borrowed money outstanding for as long as possible.  I still have ~25 years of amortization left, but if I had substantially less years to maturity I would happily refinance back into a 30 year and pull out the maximum amount of equity.

For the average person not paying off the mortgage can be a huge risk.

Say you earn 3000 and your mortgage is 1000 (in my country, this is an average income and an average mortgage payment). Every time you make an extra payment, your monthly mortgage payment gets lower. Say you overpay 200 every month and at some point your remaining mortgage payment is 750. Say the economy turns bad and you lose your job. You find a new job and your income is now 2250. You have no problems paying your mortgage every month, even though you took a pay cut, because you paid off part of your mortgage early.

If you're earning 3000, your mortgage is 1000 and you're not overpaying 200/month but investing that. The economy turns bad, you lose your job. Your income is now 2250 and the mortgage payment still 1000. For the average person this will be very hard. Of course, you have some money invested, but if the stock market is down, you might have to sell it at a big loss. This is risky.

If you're mustachian and your mortgage is low, you have a very good job and a massive stash, paying off a mortgage is not important. But for the average person it's probably a sensible thing to do.

first in the US paying down a mortgage doesnt lower your payments unless you ask for a recast - i would assume this to be true in most countries.

second for that reason above paying down a low fixed rate mortgage over time increases your risk of finincial failure in the situation you describe where you lose a job.  you have less capital now if you had been pumping it into a mortgage than the market - if you've paid an extra 50k on a 200k mortgage and i invested that 50k in the market and lets assume there was no gain on it at all which is unlikley but it crashes by 40% i still have 30k more dollars available to keep paying my mortgage while i find a job. 

so if the average person is actually investing the difference they are infact in a better place than the others who may be paying down their mortgage specifically b/c they dont have a lot of other savings b/c they arent mustachian.

I don't really know how mortgages work in other countries, honestly. This is how it happens in my country. You can ask for the loan term to be shortened, but not every mortgage lender allows that. Standard mortgage is 30 years, usually fixed (currently very low, 1,75%) interest for the first 10 years, interest is deductible. Most mortgages start off at 100-105% of the value of the property.

I think to get from a 1000 to a 750/month payment you're indeed looking at a sum of about 50.000 that's either paid off or invested. If we're talking about a serious economic crisis like 2008, I think it's absolutely not unthinkable that investments lose 40% in value. My country's index lost about 60% between 2007 and 2009. The average person has never heard of niche things like index funds and low cost brokers. He will probably have an account with a high street bank and follow their investment advice and might lose a lot more than 60%. On top of that in this country he has to pay 1,2% of the value of his investments in wealth taxes every year (but not for the value of his main home) but I know that doesn't apply in the US.

Now, I'm not saying investing is a bad choice at all. I'm investing a large part of my income every month and mathematically, it's the best choice - if you're making sensible choices. But unless you know what you're doing, investing is risky and over the past couple of decades it seems that any investing product sold on a large scale to consumers has turned out to be a scam. I know many average people who lost their life savings in scams like these. And most people don't know anything about hidden costs and low cost brokers. High street banks may take 3-5% of the value of your portfolio in hidden costs on a yearly basis. For a mustachian, or someone with a real interest in investing, of course investing is better. But if you're an average person, no interest or knowledge at all in economics or investing, paying off a mortgage is generally a much better option.

@Imma: That is pretty interesting. Aren't there low cost index funds that people can invest in? Also, if I was getting a 3% haircut every year, it would seem that I'd want to break that cycle - which seems like a purely informational problem as I understand it. It might then be a great business opportunity.


mizzourah2006

  • Bristles
  • ***
  • Posts: 319
  • Age: 34
  • Location: NWA
Re: Do you regret paying off your mortgage early?
« Reply #366 on: November 29, 2017, 07:05:57 AM »
Kind of an odd question given that there really isn't any way someone could know what the alternative is/was at the time. They could backtest it, but at the time most people started making the decision to put more towards their mortgage were the choices really between VTSAX and a 3.5% mortgage? Plus the entire idea of cognitive dissonance makes regret on something like this extremely unlikely. I doubt anyone who paid off their mortgage in 2010 regrets it. Similarly, I doubt anyone who started aggressively investing an extra 2-3k/month into VTSAX at the same time regrets it either.

But it's difficult to argue that there isn't more risk in putting additional capital into your home until the point where it is paid off given the liquidity of the asset.

Malkynn

  • 5 O'Clock Shadow
  • *
  • Posts: 65
Re: Do you regret paying off your mortgage early?
« Reply #367 on: November 29, 2017, 07:28:35 AM »
It really does depend on the individual situation.

For me, Iím lined up to save more than enough for retirement pretty much regardless of what I do, so making as much as possible as quickly as possible isnít really my thing.

So instead, I focus on what makes me happy.
Well, having a lot of flexibility makes me happy, and the fewer demands I have on my monthly cash flow, the more flexibility I have.

Maintaining a mortgage is all fine and good if your brand of mustachianism revolves around FIRE, but if itís more about living your best life through frugality and badassity, then figure out what makes you happy and plan your financial moves accordingly. Not the other way around.

People tend to miss that MMM didnít actually have to achieve FIRE to live the life he does now, it just made it easier and safer for him to try. He could have skipped the decade of traditional work and went straight to his current lifestyle without the FIRE security blanket and would have been just fine.
FIRE isnít what makes living your best life possible, itís just one strategy for trying to.

That said, for me personally, Iím not an island. My income doesnít go towards the mortgage because mine is highly variable so the mortgage has no impact on my career or cash flow. If I were single, I would prioritize paying it down ASAP, but we live on the lower of our two incomes, which is highly stable and requires a certain number of years for a full pension anyway. So yeah, we donít bother paying down the mortgage at this time because itís not affecting our career flexibility.

Thereís no one size fits all.
Everyone needs to figure out whatís right for them.

BlueHouse

  • Magnum Stache
  • ******
  • Posts: 2585
  • Location: WDC
Re: Do you regret paying off your mortgage early?
« Reply #368 on: November 29, 2017, 10:17:04 AM »
I haven't my mortgage off, but here are some circumstances that would make me regret it, if I had.

1.  If I use house as a rental, I don't want any part of it paid off, because I can offset rental income against expenses.
2.  If I decide to walk away from the house and leave taxpayers / banks on the hook for it. 
3.  If I had uncanny knowledge of the future and knew that markets were going to rise quickly, evenly, or without any risk of volatility. 
4.  If the year were 2010 and I invested in Amazon. 

Sometimes nothing can be a real cool hand

NoraLenderbee

  • Handlebar Stache
  • *****
  • Posts: 1064
Re: Do you regret paying off your mortgage early?
« Reply #369 on: November 29, 2017, 10:43:57 AM »

The original question was asking if those who paid off their mortgage regretted it. What about that sets off a flood of people insisting that early mortgage payers are dim bulbs who don't understand math and other things that make mortgage holders smarter, better looking, and all-around better people?

QFT

Livewell

  • Stubble
  • **
  • Posts: 174
  • Location: SF Bay Area
Re: Do you regret paying off your mortgage early?
« Reply #370 on: November 29, 2017, 11:12:25 AM »
We paid off our house in 2012.

Would have made more money in the market, but after having lived through (and being old enough to understand) 2000-1 and 2008-9, it felt right.

The extra sleep enabled me to focus at work, which ended up in a large uptick in my commissions since 2012. 

Occasionally I have a ďwhat ifĒ regret, which is quickly squashed!

thriftycanadian

  • Stubble
  • **
  • Posts: 222
  • Location: Somewhere West of TO
Re: Do you regret paying off your mortgage early?
« Reply #371 on: November 29, 2017, 11:27:22 AM »
No regrets. Paid of the house 14 years ago and it has helped me be more aggressive in my investing and in taking significant career risk - which did quite well.

I agree, paid off my home 7 years ago.  Taking more career risk is a benefit and something I have enjoyed doing recently as a result. In my case, taking on new and challenging roles without a lot of worry whether I will fall flat on my face or not. 
Whether the math works out or not, no one knows where interest rates will go for sure.  There is an intangible psychological aspect of paying it off early.

GuitarStv

  • Walrus Stache
  • *******
  • Posts: 9508
  • Age: 36
  • Location: Toronto, Ontario, Canada
Re: Do you regret paying off your mortgage early?
« Reply #372 on: November 29, 2017, 11:34:58 AM »

Sun Hat

  • Stubble
  • **
  • Posts: 184
  • Location: Canada
Re: Do you regret paying off your mortgage early?
« Reply #373 on: November 29, 2017, 12:32:50 PM »
Like many others, I don't regret paying off my mortgage early, even though I would have had a higher return had I invested the difference. The comfort/security/certainty of having a paid-for house is wonderful. Some people may have a higher tolerance for risk, but I'm a worrier and not having to worry about my home is delightful.

Growing up, I got to see how having a paid for house allowed my mother to take career risks, so I equated owning a house free and clear with freedom of choice. A healthy stash would provide the same benefit, but just wasn't the mental image that I grew up appreciating.


thriftycanadian

  • Stubble
  • **
  • Posts: 222
  • Location: Somewhere West of TO
Re: Do you regret paying off your mortgage early?
« Reply #374 on: November 29, 2017, 12:56:53 PM »
Like many others, I don't regret paying off my mortgage early, even though I would have had a higher return had I invested the difference. The comfort/security/certainty of having a paid-for house is wonderful. Some people may have a higher tolerance for risk, but I'm a worrier and not having to worry about my home is delightful.

Growing up, I got to see how having a paid for house allowed my mother to take career risks, so I equated owning a house free and clear with freedom of choice. A healthy stash would provide the same benefit, but just wasn't the mental image that I grew up appreciating.

And when you get to both a paid off home AND a healthy stash, then all is grand!

Car Jack

  • Bristles
  • ***
  • Posts: 474
Re: Do you regret paying off your mortgage early?
« Reply #375 on: November 29, 2017, 01:11:25 PM »
Regret?  Absolutely not.

When I paid off my mortgage, I had experienced black Monday in 87 with a stock that never recovered and then some semi-day trading in the early 2000's.  I decided that I would only invest in my mortgage or in US Savings bonds.  Proof of my aversion to the market at that time remains today.  I still have $350k in US Savings bonds after having sold off $100k worth.


Exflyboy

  • Magnum Stache
  • ******
  • Posts: 4626
  • Age: 56
  • Location: Corvallis, Oregon
Re: Do you regret paying off your mortgage early?
« Reply #376 on: November 29, 2017, 01:41:29 PM »
No.. The likleyhood of losing my job back in 2003 was high so even though I know I would have more money today in hindsight, having the roof over your head paid for is a huge comfort.

Bateaux

  • Pencil Stache
  • ****
  • Posts: 861
  • Location: Port Vincent
Re: Do you regret paying off your mortgage early?
« Reply #377 on: November 29, 2017, 01:54:42 PM »
Paying off my mortage early was tge most empowering feeling I've ever had.  Now, that old mortage is now a pittance compared to todays average mortage.  Still, knowing that the place my family sleeps at night is ours is extremely comforting.   Maybe you can make more money investing in stock and keeping a mortage, nothing is more important to me than debt freedom.  Once there are no debts money builds rapidly.  The extremely disciplined may be able to work the juggle.
ďPerfection is achieved, not when there is nothing more to add, but when there is nothing left to take away.Ē
 ― Antoine de Saint Exupery-

Class of 2019

Dicey

  • Walrus Stache
  • *******
  • Posts: 6527
  • Age: 59
  • Location: NorCal
Re: Do you regret paying off your mortgage early?
« Reply #378 on: November 29, 2017, 02:06:57 PM »
The original question was asking if those who paid off their mortgage regretted it. What about that sets off a flood of people insisting that early mortgage payers are dim bulbs who don't understand math and other things that make mortgage holders smarter, better looking, and all-around better people?
Ooh, our primary home has no mortgage (never has), but all of our rentals do and probably always will. Does this mean we fit your description? <Dicey bats her eyelashes prettily.> HA!

For the record, none of the pro-mortgage folks really care if you have a mortgage or not. What we want you to work through before you choose to prepay is what the consequences are. If you get that, then go for it! But if you don't understand what you're giving up, for God's sake, learn before you do. It's really that simple.

The downside of improper sequencing isn't likely to make itself felt for many years, at which point, making up the loss may be damn difficult impossible. At the very least, waiting to invest over paying down/off the fixed-rate mortgage will cost you more soldiers out of pocket.
I did it! I have a journal!
A Lot Like This
And hell yes, I am still moving confidently in the direction of my dreams...

Imustacheyouaquestion

  • Stubble
  • **
  • Posts: 206
Re: Do you regret paying off your mortgage early?
« Reply #379 on: November 29, 2017, 02:30:19 PM »
Unless you are very risk averse, the math favors leveraging over the long term.

Another angle for considering risk is that well-diversified investments spread risk across all of the individual assets that make up those funds, whereas home equity is consolidating risk in a single asset. Those pointing out that nobody can predict the stock market's future should also acknowledge that nobody can predict the housing market either. Although, even if your house becomes worthless on paper, it can still provide you shelter, which has real-world value that investments can't match.


RH

  • 5 O'Clock Shadow
  • *
  • Posts: 94
Re: Do you regret paying off your mortgage early?
« Reply #380 on: November 29, 2017, 02:40:22 PM »
A funny thing happened when we paid off the mortgage a few months ago. With so much equity in the house, we realized we didn't even like our house and can't wait to move to our dream house!!? Totally unexpected. The dream house (wherever that may be) will cost less than the equity in our current house since we no longer need to live a few blocks from tons of bars/restaurants, etc...

NoraLenderbee

  • Handlebar Stache
  • *****
  • Posts: 1064
Re: Do you regret paying off your mortgage early?
« Reply #381 on: November 29, 2017, 05:46:27 PM »

The original question was asking if those who paid off their mortgage regretted it. What about that sets off a flood of people insisting that early mortgage payers are dim bulbs who don't understand math and other things that make mortgage holders smarter, better looking, and all-around better people?

And they're at it already! Seriously, can we not have one single thread where mortgage-pay-offers aren't reminded of the financial disadvantages and asked "Are you SUUUUUUURE you want to do that????"

boarder42

  • Walrus Stache
  • *******
  • Posts: 6077
Re: Do you regret paying off your mortgage early?
« Reply #382 on: November 29, 2017, 06:34:48 PM »

The original question was asking if those who paid off their mortgage regretted it. What about that sets off a flood of people insisting that early mortgage payers are dim bulbs who don't understand math and other things that make mortgage holders smarter, better looking, and all-around better people?

And they're at it already! Seriously, can we not have one single thread where mortgage-pay-offers aren't reminded of the financial disadvantages and asked "Are you SUUUUUUURE you want to do that????"

Nope
My Miles Journal -Learn to Manufacture spend(MS)

Best super bonuses on Credit cards right now

1. Delta Gold 60k miles Ends 1/31/2018
2. Delta Platinum - 70k miles - Ends 1/31/2018

Delta Business Gold - Ends 1/31/2018

Join Personal Capital - We each get 20 bucks!!
 https://www.talkable.com/x/StjGrn

boarder42

  • Walrus Stache
  • *******
  • Posts: 6077
Re: Do you regret paying off your mortgage early?
« Reply #383 on: November 29, 2017, 06:39:50 PM »
Unless you are very risk averse, the math favors leveraging over the long term.

Another angle for considering risk is that well-diversified investments spread risk across all of the individual assets that make up those funds, whereas home equity is consolidating risk in a single asset. Those pointing out that nobody can predict the stock market's future should also acknowledge that nobody can predict the housing market either. Although, even if your house becomes worthless on paper, it can still provide you shelter, which has real-world value that investments can't match.

If investments become worthless you had better have guns and beans because the free market economy will have collapsed. And guess what those with a mortgage will still keep their house because no one will be there to collect the payment. Come on now

This is the worst statement made by mortgage prepayera. I don't know if there is a worse statement as to the understanding of economics than I have a roof over my head because my house is paid off and the market could collapse but I still have this.
My Miles Journal -Learn to Manufacture spend(MS)

Best super bonuses on Credit cards right now

1. Delta Gold 60k miles Ends 1/31/2018
2. Delta Platinum - 70k miles - Ends 1/31/2018

Delta Business Gold - Ends 1/31/2018

Join Personal Capital - We each get 20 bucks!!
 https://www.talkable.com/x/StjGrn

keyvaluepair

  • 5 O'Clock Shadow
  • *
  • Posts: 86
  • Age: 53
  • Location: Pacific Northwest
Re: Do you regret paying off your mortgage early?
« Reply #384 on: November 29, 2017, 06:54:08 PM »
When I paid off in '09, in the depth of a downturn, it wasn't clear at all that there was an upturn ahead and when. So when I paid off the mortgage, it was quantitatively a decent thing to do without knowledge of a future upturn. So I find these binary discussions a little bit off the mark since the decision has to be made at a point in time. Those who paid off their mortgages are not always incapable of doing math, just not of predicting the future.

So no, no regrets at all. As I also said earlier, having the mortgage off my back, allowed me to take risks that have paid off in terms of stash health and my current FIRE.   

boarder42

  • Walrus Stache
  • *******
  • Posts: 6077
Re: Do you regret paying off your mortgage early?
« Reply #385 on: November 29, 2017, 06:57:01 PM »
When I paid off in '09, in the depth of a downturn, it wasn't clear at all that there was an upturn ahead and when. So when I paid off the mortgage, it was quantitatively a decent thing to do without knowledge of a future upturn. So I find these binary discussions a little bit off the mark since the decision has to be made at a point in time. Those who paid off their mortgages are not always incapable of doing math, just not of predicting the future.

So no, no regrets at all. As I also said earlier, having the mortgage off my back, allowed me to take risks that have paid off in terms of stash health and my current FIRE.

How do you plan to retire without projecting future typical stock gains and inflation. The entire premise of fire is based upon avg stock returns and inflation. 
My Miles Journal -Learn to Manufacture spend(MS)

Best super bonuses on Credit cards right now

1. Delta Gold 60k miles Ends 1/31/2018
2. Delta Platinum - 70k miles - Ends 1/31/2018

Delta Business Gold - Ends 1/31/2018

Join Personal Capital - We each get 20 bucks!!
 https://www.talkable.com/x/StjGrn

sherr

  • Bristles
  • ***
  • Posts: 381
  • Age: 32
  • Location: North Carolina
Re: Do you regret paying off your mortgage early?
« Reply #386 on: November 29, 2017, 07:04:33 PM »
When I paid off in '09, in the depth of a downturn, it wasn't clear at all that there was an upturn ahead and when. So when I paid off the mortgage, it was quantitatively a decent thing to do without knowledge of a future upturn. So I find these binary discussions a little bit off the mark since the decision has to be made at a point in time. Those who paid off their mortgages are not always incapable of doing math, just not of predicting the future.

So no, no regrets at all. As I also said earlier, having the mortgage off my back, allowed me to take risks that have paid off in terms of stash health and my current FIRE.

How do you plan to retire without projecting future typical stock gains and inflation. The entire premise of fire is based upon avg stock returns and inflation.

Hey boarder42, I generally agree with you, but I think the point has been made. You don't need to badger people about it. People are emotional creatures too, and it's okay to be what you are. Also having a lower required monthly income definitely does reduce risk and (for example) allow you to take riskier career moves.

This thread is for people to answer the question. We all know your (our) opinion, let's let them tell their stories too.

sherr

  • Bristles
  • ***
  • Posts: 381
  • Age: 32
  • Location: North Carolina
Re: Do you regret paying off your mortgage early?
« Reply #387 on: November 29, 2017, 08:19:54 PM »
I guess I can actually contribute too. I'm in the "Don't Pay Off Your Mortgage" club now for my second house (and current home), which is pretty much a no-brainer at my current 2.5% interest rate (ARM, fixed for 10 years).

But I wasn't for the first house that we turned into a rental after we moved out. Even though I had started reading the MMM forums towards the end, and had read boarder42's (and similar) posts on why it was a bad idea. Even with the (uncertain) rental income coming in, my wife and I knew we wanted to have kids soonish. And that when we did she would quit her job and be a stay-at-home-mom.

The proposition of being faced with two mortgages, (possibly) no renters, (possibly) repairs, and the scary unknown world of raising a kid - all on one income - was just a little much. So we made sure to pay off the first mortgage before we had the kid and my wife quit.

Do I regret it? Sure, a little. In retrospect everything would have worked out fine and we would have had more money in the bank now, not to mention deducting the interest from the rental income on my taxes. But there was also a very real risk reduction and emotional security consideration involved.

And I plan on doing it again. After we achieve FI, and before we RE, I plan on paying off the mortgage on the second house. Because enough is enough, and if you already have enough what more can you ask for but an extra bit of peace of mind?

keyvaluepair

  • 5 O'Clock Shadow
  • *
  • Posts: 86
  • Age: 53
  • Location: Pacific Northwest
Re: Do you regret paying off your mortgage early?
« Reply #388 on: November 29, 2017, 08:34:40 PM »
When I paid off in '09, in the depth of a downturn, it wasn't clear at all that there was an upturn ahead and when. So when I paid off the mortgage, it was quantitatively a decent thing to do without knowledge of a future upturn. So I find these binary discussions a little bit off the mark since the decision has to be made at a point in time. Those who paid off their mortgages are not always incapable of doing math, just not of predicting the future.

So no, no regrets at all. As I also said earlier, having the mortgage off my back, allowed me to take risks that have paid off in terms of stash health and my current FIRE.

How do you plan to retire without projecting future typical stock gains and inflation. The entire premise of fire is based upon avg stock returns and inflation.
I think you missed my point. When I was faced with the choice, I had uncertainty in terms of when we were going to pull out of the downturn vs an assured mortgage interest payment. The decision had to be made at the point in time - given that I had no knowledge of the future, I chose the minimax strategy. So while average returns are all very well and that is how we plan for FIRE anyway, remember that the decision problem is always time dependent. Finally, note that stock prices are Markovian, which means that stock price evolution is determined by today's price and the risk free interest rate - you can draw the obvious conclusion at this point.

I might make a different decision today.
« Last Edit: November 29, 2017, 08:45:04 PM by keyvaluepair »

Bierbrewer

  • 5 O'Clock Shadow
  • *
  • Posts: 6
  • Age: 38
  • Location: North Dakota
  • Giddy Up, Giddy On Up
Re: Do you regret paying off your mortgage early?
« Reply #389 on: November 29, 2017, 09:01:19 PM »
2004-Purchased current new house for $169K.  Thought we were stretching ourselves to buy that property at that price.
Planned to pay the property off in 7 years by putting $13K extra toward the principal per year.  We thought that was a huge goal at the time.  Followed that plan and paid it off in 2010.  Not having a mortgage on the primary residence allowed our extra cash flow to add up quite quickly allowing us to purchase our first rental property in 2012 with 25% down.  Bought a total of 4 rental properties between 2012 and 2015.  Used the snowball effect to pay off the highest interest rate one first and so on down the line.  Have 3 of the 4 rentals and the primary all paid off as of today.  The 4th rental will be paid off in October of 2019.

 I do not regret one bit having paid off the rentals or our primary home.  If you had a crystal ball and could have seen what the stock market did in the past 5 years, yeah, it probably would have made more sense to stick the money into index funds.  But what if it the market went the other direction and we were down 30%?  Sticking that money into the market would have looked pretty silly at that point.  Paying off those mortgages looks good no matter what the stock market had done in that time.  Also, the $45K/year of NET operating income on the 3 paid off rentals looks pretty good right now.  It will be around $70K/year NET when the 4th one gets paid off.  Also, when this market corrects, I'll have rental income I can plow into index funds that are on sale.  Just my .02

boarder42

  • Walrus Stache
  • *******
  • Posts: 6077
Re: Do you regret paying off your mortgage early?
« Reply #390 on: November 30, 2017, 03:11:51 AM »
When I paid off in '09, in the depth of a downturn, it wasn't clear at all that there was an upturn ahead and when. So when I paid off the mortgage, it was quantitatively a decent thing to do without knowledge of a future upturn. So I find these binary discussions a little bit off the mark since the decision has to be made at a point in time. Those who paid off their mortgages are not always incapable of doing math, just not of predicting the future.

So no, no regrets at all. As I also said earlier, having the mortgage off my back, allowed me to take risks that have paid off in terms of stash health and my current FIRE.

How do you plan to retire without projecting future typical stock gains and inflation. The entire premise of fire is based upon avg stock returns and inflation.

Hey boarder42, I generally agree with you, but I think the point has been made. You don't need to badger people about it. People are emotional creatures too, and it's okay to be what you are. Also having a lower required monthly income definitely does reduce risk and (for example) allow you to take riskier career moves.

This thread is for people to answer the question. We all know your (our) opinion, let's let them tell their stories too.

This thread is 2 years old and was revived. I will comment on any and every thread about a mortgage pay down until this community starts treating it like an Escalade.
My Miles Journal -Learn to Manufacture spend(MS)

Best super bonuses on Credit cards right now

1. Delta Gold 60k miles Ends 1/31/2018
2. Delta Platinum - 70k miles - Ends 1/31/2018

Delta Business Gold - Ends 1/31/2018

Join Personal Capital - We each get 20 bucks!!
 https://www.talkable.com/x/StjGrn

GuitarStv

  • Walrus Stache
  • *******
  • Posts: 9508
  • Age: 36
  • Location: Toronto, Ontario, Canada
Re: Do you regret paying off your mortgage early?
« Reply #391 on: November 30, 2017, 09:50:44 AM »
When I paid off in '09, in the depth of a downturn, it wasn't clear at all that there was an upturn ahead and when. So when I paid off the mortgage, it was quantitatively a decent thing to do without knowledge of a future upturn. So I find these binary discussions a little bit off the mark since the decision has to be made at a point in time. Those who paid off their mortgages are not always incapable of doing math, just not of predicting the future.

So no, no regrets at all. As I also said earlier, having the mortgage off my back, allowed me to take risks that have paid off in terms of stash health and my current FIRE.

How do you plan to retire without projecting future typical stock gains and inflation. The entire premise of fire is based upon avg stock returns and inflation.

Hey boarder42, I generally agree with you, but I think the point has been made. You don't need to badger people about it. People are emotional creatures too, and it's okay to be what you are. Also having a lower required monthly income definitely does reduce risk and (for example) allow you to take riskier career moves.

This thread is for people to answer the question. We all know your (our) opinion, let's let them tell their stories too.

This thread is 2 years old and was revived. I will comment on any and every thread about a mortgage pay down until this community starts treating it like an Escalade.

So, you recommend that anyone who has paid off their home should remortgage?

protostache

  • Pencil Stache
  • ****
  • Posts: 772
Re: Do you regret paying off your mortgage early?
« Reply #392 on: November 30, 2017, 09:53:12 AM »
When I paid off in '09, in the depth of a downturn, it wasn't clear at all that there was an upturn ahead and when. So when I paid off the mortgage, it was quantitatively a decent thing to do without knowledge of a future upturn. So I find these binary discussions a little bit off the mark since the decision has to be made at a point in time. Those who paid off their mortgages are not always incapable of doing math, just not of predicting the future.

So no, no regrets at all. As I also said earlier, having the mortgage off my back, allowed me to take risks that have paid off in terms of stash health and my current FIRE.

How do you plan to retire without projecting future typical stock gains and inflation. The entire premise of fire is based upon avg stock returns and inflation.

Hey boarder42, I generally agree with you, but I think the point has been made. You don't need to badger people about it. People are emotional creatures too, and it's okay to be what you are. Also having a lower required monthly income definitely does reduce risk and (for example) allow you to take riskier career moves.

This thread is for people to answer the question. We all know your (our) opinion, let's let them tell their stories too.

This thread is 2 years old and was revived. I will comment on any and every thread about a mortgage pay down until this community starts treating it like an Escalade.

Relevant XKCD

jfolsen

  • 5 O'Clock Shadow
  • *
  • Posts: 83
Re: Do you regret paying off your mortgage early?
« Reply #393 on: November 30, 2017, 10:35:08 AM »
Paid off the mortgage. Huge milestone, as we intend to live in this house for the foreseeable future. Was it sub-optimal in terms of money accumulation? Yes. But it made us happy. And in terms of risk it may have been correct. As you get older it gets harder and harder to change jobs and maintain your level of income. I had a sudden and unexpected lack of employment several years ago, had an emergency fund but it was still stressful to dip into it. If it happens again, much less stress.

neverrun

  • Bristles
  • ***
  • Posts: 355
  • Location: Midwest
Re: Do you regret paying off your mortgage early?
« Reply #394 on: November 30, 2017, 10:47:57 AM »
I guess I did.  Paid off my previous home in 2016, bought a new home in 2017, took out a modest mortgage and invested the mortgage money in an brokerage account.  I do round up but otherwise I'm not, I may lump sum pay it off when I FIRE but otherwise it is there.  If the market tanks so much that I can't survive after cashing in on investments for immediate needs and I loose my job I have bigger problems than having a paid off house could solve.  I might not feel the same way if I was just starting out investing non-tax advantaged money. 

Yes Boarder converted me to an extent.

Dicey

  • Walrus Stache
  • *******
  • Posts: 6527
  • Age: 59
  • Location: NorCal
Re: Do you regret paying off your mortgage early?
« Reply #395 on: November 30, 2017, 10:51:09 AM »
When I paid off in '09, in the depth of a downturn, it wasn't clear at all that there was an upturn ahead and when. So when I paid off the mortgage, it was quantitatively a decent thing to do without knowledge of a future upturn. So I find these binary discussions a little bit off the mark since the decision has to be made at a point in time. Those who paid off their mortgages are not always incapable of doing math, just not of predicting the future.

So no, no regrets at all. As I also said earlier, having the mortgage off my back, allowed me to take risks that have paid off in terms of stash health and my current FIRE.

How do you plan to retire without projecting future typical stock gains and inflation. The entire premise of fire is based upon avg stock returns and inflation.

Hey boarder42, I generally agree with you, but I think the point has been made. You don't need to badger people about it. People are emotional creatures too, and it's okay to be what you are. Also having a lower required monthly income definitely does reduce risk and (for example) allow you to take riskier career moves.

This thread is for people to answer the question. We all know your (our) opinion, let's let them tell their stories too.

This thread is 2 years old and was revived. I will comment on any and every thread about a mortgage pay down until this community starts treating it like an Escalade.

Relevant XKCD
Are you implying that boarder42 is wrong or are you just trying vainly to be funny?
I did it! I have a journal!
A Lot Like This
And hell yes, I am still moving confidently in the direction of my dreams...

NoraLenderbee

  • Handlebar Stache
  • *****
  • Posts: 1064
Re: Do you regret paying off your mortgage early?
« Reply #396 on: November 30, 2017, 11:20:07 AM »

I will comment on any and every thread about a mortgage pay down until this community starts treating it like an Escalade.

That comparison is ridiculous, insulting, and wrong. The people here who pay off their mortgages are doing so KNOWING that it does not provide the highest ROI in $ terms. They accept the lower ROI because it improves their quality of life, eliminating one debt and giving them peace of mind. MMM isn't about making the most money possible--if it were, we'd all be working three jobs and living in a van with five roommates.  Are you doing that?

Stop acting like an asshole.


sherr

  • Bristles
  • ***
  • Posts: 381
  • Age: 32
  • Location: North Carolina
Re: Do you regret paying off your mortgage early?
« Reply #397 on: November 30, 2017, 11:28:13 AM »
This thread is 2 years old and was revived. I will comment on any and every thread about a mortgage pay down until this community starts treating it like an Escalade.

Relevant XKCD
Are you implying that boarder42 is wrong or are you just trying vainly to be funny?

He is implying that boarder42 is behaving like the guy in the comic and it seems to me to be an apt comparison.

protostache

  • Pencil Stache
  • ****
  • Posts: 772
Re: Do you regret paying off your mortgage early?
« Reply #398 on: November 30, 2017, 11:35:21 AM »
Are you implying that boarder42 is wrong or are you just trying vainly to be funny?

I don't think boarder42 is wrong, nor do I think you or anyone else in the "Don't pay off your mortgage club" is wrong. I think y'all are making the correct decision for you, in your circumstances, with your emotional tolerance. I'm trying to point out to b42 that he's acting foolish if he thinks he'll change anyone's mind by posting the exact same spiel "in any and every thread about a mortgage pay down until this community starts treating it like an Escalade", both in the "mortgage payoff club" and *especially* this particular necro'd thread, and then getting defensive about it when people politely and not-so-politely ask him to knock it off.

Sometimes people do "wrong" things, and then they post about them on the internet. Continuously telling them they're wrong just sucks all the oxygen out of the room. That's not discussion, that's browbeating.

boarder42

  • Walrus Stache
  • *******
  • Posts: 6077
Re: Do you regret paying off your mortgage early?
« Reply #399 on: November 30, 2017, 11:37:59 AM »

I will comment on any and every thread about a mortgage pay down until this community starts treating it like an Escalade.

That comparison is ridiculous, insulting, and wrong. The people here who pay off their mortgages are doing so KNOWING that it does not provide the highest ROI in $ terms. They accept the lower ROI because it improves their quality of life, eliminating one debt and giving them peace of mind. MMM isn't about making the most money possible--if it were, we'd all be working three jobs and living in a van with five roommates.  Are you doing that?

Stop acting like an asshole.

not everyone is doing it and the reason there arent support groups for escalades and maid service here are b/c its bad for the general user to see and say oh that makes sense i should do it.  I'm not being an ass hole but thanks for the personal attack that added no value.  I would guess many of the people who have changed their plans based on my many posts are very happy about it.  The fact that those who do pay down their mortgages are so combative and insulting further proves the point that its a bad decision.
My Miles Journal -Learn to Manufacture spend(MS)

Best super bonuses on Credit cards right now

1. Delta Gold 60k miles Ends 1/31/2018
2. Delta Platinum - 70k miles - Ends 1/31/2018

Delta Business Gold - Ends 1/31/2018

Join Personal Capital - We each get 20 bucks!!
 https://www.talkable.com/x/StjGrn