The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: gomike on September 01, 2014, 09:54:33 PM
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I am 36 years old with 75% home equity. I am wondering how old everyone was when they paid off their house. Or if you still have a mortgage how old are you and what percent equity do you have.
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23 and I'm at about 70% equity. Should have it paid off within a year or two, but I'm not in a huge hurry.
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32 and currently at 73% equity (wow, I had never worked that out before!!), have been making significant overpayments the whole time. However... we bought the house to renovate it, so when we get to that, overpayments will stop and we will be ploughing all that extra money into the house. I guess our equity will still increase, since we will be gaining 'sweat equity', but our mortgage will remain the same (well, just reduce by the monthly principle) for a few years.
If we didn't do anything to the house, it would be paid off at this rate in 2016 (age 34). If we spend our budgetted amount on it, we could pay it off in 2019 (age 37), assuming our work situation remains the same. If we decide to have kids, all bets are off.
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I'm 38 and at 67% equity. We're in no rush to pay ours off as we have a very low interest rate.
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25 when I paid off the first house I lived in, but that was after selling the first two investment properties made good profit on them. It does not matter when you pay it off, it is what you do after that but you both seem on the right track. Stupid me up graded to five bedroom two story home and decided it was time to go to university with 50% equity. Oh what fun that was, house fully of flat mates paying off the mortgage and undertaking renovation. In the end finished the degree, sold the house on Christmas Day negotiation during lunch with me providing vendor finance. Luckily to come out with a small profit, learned house can go up and down and you don't always walk away with all your money.
Just keep doing what you doing and your be free of that mortgage.
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We were 42 when we paid off the house. The oldest had just begun college.
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27. We also bought our first rental home at 27.
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We still owe $10,000, so it will be paid off in 2015. I will be 33 and my wife will be 29.
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24. What does it mean to "pay off a house?" Is that like when you give your cash to the seller and they give you a deed? Then yea, mine was paid off the day I bought it ;)
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29, after 5 years of having the mortgage
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36, after 9 months of having a mortgage. Complicated story, but in short: I'd saved up my money for the house, but got a great deal on a long term CD right before things crashed, then wanted to get the house a year earlier than planned... Best deal was to pickup a mortgage for a bit until I could get at my money penalty free.
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I didn't even buy a house until I was 41. Ten years later, we've paid almost half the mortgage (120K of 250K). I could pay it off completely now, but it seems better to invest.
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Had a paid off home at age 35. At today's interest rates we will plan to never pay off our current home.
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Not quite yet.
We got 150k left no the mortgage, but the rate is a ridiculous 2.99% (5yr). We're both 35. I say no rush at this interest rate but GF disagrees and we're attacking it pretty fast. Probably be done before we're 40. Kinda mind blowing when we're done paying it off the house will probably be 700k.
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Wow! We are in the minority (at least of people who have responded) in that we have less than 50% equity (~38%) but we've only owned the house for a year and have a 15 year loan at 2.5% so we are in no hurry to pay it off. We plan to pay it off on schedule in 2028, one year before the kids go to college (twins) and FIRE the same year. We are currently 32 and 30.
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I'm 38 and at 67% equity. We're in no rush to pay ours off as we have a very low interest rate.
Yay for you for understanding this principle!
To everyone else who has responded, I offer you hearty congratulations under the following conditions:
You have no other debt (assumed) and more importantly, that you have stuffed your retirement accounts for every single year you were eligible to do so.
As for me, we paid cash for our new house, but with the current low rates, I'm still itching for a cheap mortgage. Can't promise we won't do it.
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We were 45. Then we moved to a more expensive area, added a $100k for 15 years at 2.65% (timing is everything) for the difference in the old and new house cost, and don't plan on paying this one off one second early. My only regret is we didn't need this much house and could have downsized a bit and stayed mortgage free.
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Wow! We are in the minority (at least of people who have responded) in that we have less than 50% equity (~38%) but we've only owned the house for a year and have a 15 year loan at 2.5% so we are in no hurry to pay it off. We plan to pay it off on schedule in 2028, one year before the kids go to college (twins) and FIRE the same year. We are currently 32 and 30.
Definitely makes sense to do it that way. In our case, my work industry is very unstable. You can make $80k one year and lose your job and have to settle for one making $30k the next, so it was more valuable to me (mentally) to get the house paid off as quickly as possible and then concentrate on accumulating wealth from there.
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I was 27 when I paid for my first house. 150ish k.
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I'm 38 and at 67% equity. We're in no rush to pay ours off as we have a very low interest rate.
Yay for you for understanding this principle!
To everyone else who has responded, I offer you hearty congratulations under the following conditions:
You have no other debt (assumed) and more importantly, that you have stuffed your retirement accounts for every single year you were eligible to do so.
Yup, did that.
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I'm 41 and we have 72% equity in our house. The interest rate is low and the math tells me it is just way better to invest and keep some of that cash free for investments. Plus, at this level, between our house and other RE investment(which has no mortgage), we are approx 45% real estate and 45% equities so it is a good balance. If we paid off the mortgage we would be skewed too far toward RE.
Oh, but I want to dispense with the mortgage so badly! I force myself to muster every ounce of self-control to not accelerate payments. Sometimes I lose that battle and send in $10k here or $15k there. I can't help myself.
Since we are living overseas, our house is rented out - so we are pretty much splitting the profit with the bank. It is really great actually. But I still long to pay it off completely. It is totally an emotional thing. (And no need to respond with logic telling me to keep the mortgage - I already KNOW all of that. I've done that math, but it doesn't assuage that inner compulsion to be mortgage-debt free).
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I'm 38 and at 67% equity. We're in no rush to pay ours off as we have a very low interest rate.
Yay for you for understanding this principle!
To everyone else who has responded, I offer you hearty congratulations under the following conditions:
You have no other debt (assumed) and more importantly, that you have stuffed your retirement accounts for every single year you were eligible to do so.
As for me, we paid cash for our new house, but with the current low rates, I'm still itching for a cheap mortgage. Can't promise we won't do it.
Hmm ... well I bought my house with cash. Of course my offer probably saved me 5K because it cash. So, I guess that's an alternative you could throw out there.
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I'm 38 and at 67% equity. We're in no rush to pay ours off as we have a very low interest rate.
Yay for you for understanding this principle!
To everyone else who has responded, I offer you hearty congratulations under the following conditions:
You have no other debt (assumed) and more importantly, that you have stuffed your retirement accounts for every single year you were eligible to do so.
As for me, we paid cash for our new house, but with the current low rates, I'm still itching for a cheap mortgage. Can't promise we won't do it.
Hmm ... well I bought my house with cash. Of course my offer probably saved me 5K because it cash. So, I guess that's an alternative you could throw out there.
Hmmm... mpbaker. I'm not sure I understand your reply. Can you elaborate a bit? Not sure which "you" you are referring to.
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I have a mortgage by choice but could have paid it off at 36. I don't plan on paying it off until retired.
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I'm 25 (26 in a few days). I have 30% home equity but I'm not in a rush to pay it off. We have a variable interest rate of 2.35%. I have a 20 year mortgage term (four months into it!). I'll pump more money into it if the prime rate goes up but otherwise I'm sitting pretty.
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Paid off our high six figure house at 39 after 9 years of paying down a 30 year mortgage. Mathmatically it didn't make sense because the rate was so low - but it was the best piece of mind I could have bought.
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In four months at 29 :)
What's next?
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I'm 46 and have 30% equity. I'm trying to save enough money so that I could pay it off if I want or need to, but I understand that's not the best move financially. We'll see whether I want the peace of mind or can live with the payment hanging over my head once I have enough to pay it off at once. That could take anywhere from 8 years to 28 years. Yeah, I know. It's not mustachian. But I do plan to ride my bike to work tomorrow.
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We are 48 and 49 and have been mortgage free for 6 months. We now owe no money to anyone, except for monthly bills and ongoing expenses.
It feels great.
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I am 25 and have ~ 6 % equity in my house on a 30-year mortgage.
This is the 2nd year.
We plan to bring the % of equity up to at 25 % in the next 2 years and re-evaluate then
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I am 26 and are still saving up the necessary equity to get a mortage. 15%.. Getting close.. (Technically I am already there, but I am not willing to use all my liquids or start selling my stocks). When I first get a mortage, my early stage plan is to pay it off by age 35.
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25, just bought a house with 30% down. low rate of 2.09% with laughably low mortgage payments.
i like the idea of mortgage free and we could easily manage that in 10 years but i know with rates as low as they are it's not the best idea. we'll probably overpay slightly but not as much as we could.
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Oh, but I want to dispense with the mortgage so badly! I force myself to muster every ounce of self-control to not accelerate payments.
I am so there with you. My mortgage is variable and under 3%, and it's got just less than 3 years of amortization left. I just want it gone. But I know mathematically, it's likely the wrong move. I think my issue at this point is that dropping the mortgage by 2-3k shows up as a meaningful percentage of the amount still owed, while as a proportion of investments it is quite small.
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39% at age 36. Have 11 years left on a 15 year loan at 2.625%.
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~40% at age 32
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I'm 38 and at 67% equity. We're in no rush to pay ours off as we have a very low interest rate.
Yay for you for understanding this principle!
To everyone else who has responded, I offer you hearty congratulations under the following conditions:
You have no other debt (assumed) and more importantly, that you have stuffed your retirement accounts for every single year you were eligible to do so.
There's one more implied condition: You live in the US.
Here in the UK we don't get fixed interest rates for the entire term of the mortgage - it either tracks base rate, or you fix it for x years. My parents endured interest rates on their mortgage of 15% in the 90s. Paying it off early (or having savings available to do so) does, in my opinion, make sense when the rates are low NOW, but you know they can only go up.
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I'm 38 and at 67% equity. We're in no rush to pay ours off as we have a very low interest rate.
Yay for you for understanding this principle!
To everyone else who has responded, I offer you hearty congratulations under the following conditions:
You have no other debt (assumed) and more importantly, that you have stuffed your retirement accounts for every single year you were eligible to do so.
There's one more implied condition: You live in the US.
Here in the UK we don't get fixed interest rates for the entire term of the mortgage - it either tracks base rate, or you fix it for x years. My parents endured interest rates on their mortgage of 15% in the 90s. Paying it off early (or having savings available to do so) does, in my opinion, make sense when the rates are low NOW, but you know they can only go up.
Our current plan is to overpay a little, save most money for pension but also some separately to pay a lump off the mortgage should rates rise. definitely think the variable rates in the uk change your approach.
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I'm 38 and at 67% equity. We're in no rush to pay ours off as we have a very low interest rate.
Yay for you for understanding this principle!
To everyone else who has responded, I offer you hearty congratulations under the following conditions:
You have no other debt (assumed) and more importantly, that you have stuffed your retirement accounts for every single year you were eligible to do so.
There's one more implied condition: You live in the US.
Here in the UK we don't get fixed interest rates for the entire term of the mortgage - it either tracks base rate, or you fix it for x years. My parents endured interest rates on their mortgage of 15% in the 90s. Paying it off early (or having savings available to do so) does, in my opinion, make sense when the rates are low NOW, but you know they can only go up.
Australia here, Age 30, I have 20% equity. 30 years left on tthe mortgage. My personal plan is to first get $100k in my offset account. I will then see where interest rates are at and either invest or put more in the offset. The $100k gets me to a much nicer place interest wise, and if I need to lower payments then I could always actually put it on the mortgage and get the bank to recalculate payments. Interest rates were an average of 9.5% here in 2009 at one point, I have based whether I can pay back the loan on 10% interest rates.
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I'm 25, 35% equity. Single income, 6-ish percent interest. I'm on track to get it paid off in 20 years- I hope!! (Variable interest rate here too, you choose how long to fix for up to 7 years)
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46 y.o. ~35% equity. can't wait to have the money to pay it off in after-tax accounts. Hope I don't still feel the strong desire to pay it off, but that's my measure that I use.
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49 - just paid it off a few months ago.
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Three houses fully paid off by 33. Total value currently ~$1.1M.
I'm in Australia where we don't seem to have the same benefits for keeping a mortgage that those in the US do.
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House paid off at age 31.
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35 yo, 27% equity. We currently have 2.75% 7/1 ARM until June 2021. Plan on paying it off in early 2022 or refinancing. We have just about enough today in our taxable accounts to pay it off we wanted.
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No need to payoff have a 3% interest rate. If I wasn't investing it would have been paid off in 3 years. But at 3% no reason to payoff early
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40. We could have done it earlier, but put a non-mustachian car on the mortgage when it was almost done.
We have always gone with variable interest rate as this usually turns out the cheapest, and it's been really low the last few years. Still we decided to pay it off. The feeling of not owing money to anyone is GREAT.
Fun Fact: When all loans were paid off and money started accumulating I worry more about money than ever, paying attention, tracking, investing, looking for opportunities
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Paid off when I was 33, 5 years after first purchasing.
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We will have our house paid off when I am 37, or 5 years from now. Quite an accomplishment clearing a $283,000 mortgage in 10 years, while still saving for retirement.
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In the middle of refinancing from 30 yr 5.1% to 15 yr 3.5%. I will be 46.
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I am 29 with 31% equity. I am only 2 years into my 15 year 3.0% mortgage, so I see no reason to pay it off early, other than I am planning to be FI by 40 so I should be able to kick a few thousand at it here and there to make sure I achieve that goal.
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I estimate I'll be about 91 when that happens.
36 years old, ~20% equity, 2.875% 15 year loan.
Plan to move in 3-5 years and hope to get an 80% loan for 30 years at the lowest rate possible. That loan would be paid off around 70 years old. But, we'll likely move again in 25 years once the kids are grown up and get another 30 year loan.
I could pay off all debts today with cash/investments, but it's not my style. Congrats to all those who've paid it off though, good for you.
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I guess this depends on the definition of the word "house".
At 42, we chucked almost everything we had and bought a unabomber metal shed in the woods. 600 sqft... and not a "house" by most standards, but it was paid for and came with about 8 acres of woods, a bunch of deer and a very friendly fox.
We lived there about 5 years, living really low and saving money and eventually paid cash for a real house out in the shed's front yard at about age 48.
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I guess this depends on the definition of the word "house".
At 42, we chucked almost everything we had and bought a unabomber metal shed in the woods. 600 sqft... and not a "house" by most standards, but it was paid for and came with about 8 acres of woods, a bunch of deer and a very friendly fox.
We lived there about 5 years, living really low and saving money and eventually paid cash for a real house out in the shed's front yard at about age 48.
Kudos to you. Did the shed have electricity and plumbing?
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I am 32 right now and I hope the answer will be 36.
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When we bought our last house 2 years ago at age 58 we paid cash.
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27 in a few weeks. Not even close: been there 5 years, and i paid off about 13% so far. I could pay it all of right now, but I prefer stock index funds, REITs, bond funds, and other investments that area easier to take w/ me.
I will be selling my condo for a small profit hopefully next year, then I would like to go back to renting for a while. Crime is starting to spread to my area, and I am not sure exactly where I want to go, and would like to live in another city. The crime wont make the value drop overnight, but it is definitely something to think about long-term.
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I paid cash for a one-bedroom condo at age 27, with the help of a 401k loan. The loan was fully paid off ten months later, when I was age 28.
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I guess this depends on the definition of the word "house".
At 42, we chucked almost everything we had and bought a unabomber metal shed in the woods. 600 sqft... and not a "house" by most standards, but it was paid for and came with about 8 acres of woods, a bunch of deer and a very friendly fox.
We lived there about 5 years, living really low and saving money and eventually paid cash for a real house out in the shed's front yard at about age 48.
Kudos to you. Did the shed have electricity and plumbing?
Yes. By anything other than first world standards it would have been a luxury apartment. It even had rudimentary air conditioning (window units). No heat... but I'm in the south, so AC was more important.
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Right now I've got about 84% equity in the house (calculated using the original mortgage value, not the current actual value) -- I should have it paid off before the end of the year when I turn 37.
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Congrats to all the young people on here with paid off homes!
I am 48 with 87%. Could pay it off tomorrow but its only 30K at 2%. 4 years and it's done!
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It's interesting to see all the folks that paid cash for homes or paid off their homes so quickly (and at a young age) ... It's probably just selection bias (and the fact that there are a lot people in this forum), but from other threads I can't find now, I expected to see a lot more responses like Cheddar's.
25 years old with 22% equity on a 5/1 ARM. I'll probably pay this house off when I move in 5-ish years, and then get another mortgage or rent, who knows.
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It's interesting to see all the folks that paid cash for homes or paid off their homes so quickly (and at a young age) ... It's probably just selection bias (and the fact that there are a lot people in this forum), but from other threads I can't find now, I expected to see a lot more responses like Cheddar's.
25 years old with 22% equity on a 5/1 ARM. I'll probably pay this house off when I move in 5-ish years, and then get another mortgage or rent, who knows.
I would say it would depend on how much you earn, and how much the houses cost in the area you bought. For example if houses here were $100k I would have been able to purchase outright last year, or have been able to get a mortgage with 20% deposit at about 25, and have paid it off by now. However for a 1 bedroom apartment your looking at a minimum of 250k, for a house a minimum of 350k, with the average house price being somewhere between 500-550k in my current city. A previous city I lived in has a much cheaper housing sitution, however by the time I had saved my deposit I had decided that I did not want to stay there longer term as there was less job opportunities.
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Age 50. Sold a $400,000 house and paid $210,000 cash for our current home.
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33 with ~25% equity and 30 year mortgage @4.25% just refinanced which dropped payments by $100 / month. I plan on putting that extra $100 ($1200 annual) along with about $10k into a Vanguard type ETF account which will hopefully allow me to completely pay off the mortgage in 20ish years (i hope assuming 5% interest). Having this extra $ liquid is also attractive.
Currently living in a high cost real estate area (jersey city - right outside NYC) where finding investment properties that fit the 1% rule is difficult.
I give the 20yos with houses paid off already alot of credit.
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Could have paid cash, but didn't. I bought a cheap foreclosure during the housing crisis for way under what it was worth (less than my annual salary). Fixed it up a bit and refinanced (3%, rebate points) to pull out a lot of cash to invest in index funds (which has already grown by about 1/2 the purchase price). Will only pay it off if the rate jumps up high when it can start adjusting in 5 more years.
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I think I was 34 or 35 when I paid our house off. It was many years ago, so I don't recall the exact date.
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28 when I paid of the first one. When I sold that I took a 50k 401k loan to make up the difference between proceeds from the sale of the first one to pay cash at closing on the new place. Paid that off in less than 2 years at 35.
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34 years old. Had mortgage for 8.5 years. While it felt great once paid off, it was also weird. We threw all extra money at the mortgage and once it was gone, we were out of debt. Took some time to figure out what to do with the extra money. Fortunately we didn't go crazy and ended up saving it in various mutual funds and a 529.
However, this wasn't the house I expected to stay in long-term but husband doesn't want to move because the house is "paid off". So I have a new goal of saving extra money for either an addition or new house - either option to be paid with cash.
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I have a mortgage by choice but could have paid it off at 36. I don't plan on paying it off until retired.
When a bank is willing to give me a 7 year loan a 2.5%, I can't remotely justify putting a single extra penny towards principle. If in 7 years the mortgage rates are a 10%, I will write them a check. If they are at 4%, I plan on refinancing and taking cash out. I don't think I would be super aggressive (i.e. if my house doubled in value I don't think I would go much above the initial mortgage amount) but I hate having my money trapped in a low return investment.
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We were 35 when we bought it for cash, in total need of renovation and unlivable. A year later after DH worked on it was habitable, barely, so we moved in and it took another 20 years to finish it.
I always told people "and you could have a paid-for house too if you were willing to live in a pit."
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We are 33 and our oldest is 3.5 years old. We bout the the house 3 years ago for 200k and put 20% down. Since then we have refinanced several times. Now our house is worth 250k and we owe about 138k on a 15 year at 3%. I plan on carrying all the way to the end. That would correspond with out oldest going to college. I'm in no hurry its pretty cheap money.