Author Topic: Mortgage Payoff Club!!  (Read 1155955 times)

Nederstash

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Re: Mortgage Payoff Club!!
« Reply #2600 on: December 28, 2024, 03:34:16 PM »
I think we are going to start paying off the mortgage, even though we were previously in the don't pay off your mortgage (DPOYM) camp. In the last two years we moved and sold our home that had a 2.875% rate and purchased a home at 5.5% / 30 year term. The monthly cost of the PITI is 4x higher than any other ongoing monthly expense so its prohibitive to downshifting or FIRE. Moving and downsizing are an option but we have a 9 & 7 y/o that we just moved and i think staying put for stability is a good idea. We are nearly in our mid-40s so developing a plan to pay the mortgage off in ~10 years would work well for the overall plan, bar-ing any unforeseen circumstances or windfalls.

Excellent! If you're planning on staying put, you might as well create that extra breathing room!

Nederstash

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Re: Mortgage Payoff Club!!
« Reply #2601 on: December 28, 2024, 04:03:52 PM »
Closing out the year at €64473. Not mad at that at all! I was at 67k at the start of November and anticipated to be at 65k at the end of the year (roughly 200 in principal + 800 extra per month) but I received a little more bonus than expected.

Not sure what my pay will be in January; there'll be a bit of a raise plus lower tax. I'm hoping I can sock away 1500 extra a month but I won't know exactly until the end of next month.

If anyone has cute ideas for a countdown tracker (on paper or digital), please let me know!

oldtoyota

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Re: Mortgage Payoff Club!!
« Reply #2602 on: December 28, 2024, 04:49:02 PM »
$0

Gosh, that feels good to say! I'm not sure if I posted in this thread or not about paying off our mortgage.


Nederstash

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Re: Mortgage Payoff Club!!
« Reply #2603 on: December 29, 2024, 01:20:23 AM »
$0

Gosh, that feels good to say! I'm not sure if I posted in this thread or not about paying off our mortgage.

AWESOME!!!! Congratulations! How long did it take?

grantmeaname

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Re: Mortgage Payoff Club!!
« Reply #2604 on: December 29, 2024, 05:17:41 AM »
Great work!!

Trifle

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Re: Mortgage Payoff Club!!
« Reply #2605 on: December 29, 2024, 05:56:40 AM »
Congratulations @oldtoyota!!!!  It feels awesome doesn’t it? 

Great progress @Nederstash!  When I have a big goal, I like printing or drawing a picture, then dividing it up into sections that I color in.  When I was counting down my last 100 days to retirement, I printed a beautiful beach scene (found it online as a free kid’s coloring page, black and white) and divided it up into little sections, which I numbered.  I colored the beach scene in from bottom to top.  The last thing I colored in was the brilliant yellow sun after my last day of work.  For a house payoff — maybe a picture of a house made of bricks, and each brick is worth x Euros? You could have a cat sitting on the porch, or a smiling face looking out one of the windows. 

lcmac32

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Re: Mortgage Payoff Club!!
« Reply #2606 on: January 02, 2025, 09:44:51 AM »
Original Loan Amt $484,000.00

Mar 24  $483,072.97 ($500.00 add. principal)
Apr 24  $482,140.83 ($500.00 add. principal)
May 24 $481,703.54 (0.00 add. principal)
Jun 24  $481,112.22 ($151.61 add. principal)
Jul 24   $480,517.64 ($151.61 add. principal)
Aug 24 $479,919.78 ($151.61 add. principal)
Sep 24 $479,318.62 ($151.61 add. principal)
Oct 24 $478,314.14 ($551.61 add. principal)
Nov 24 $476,855.72 ($1,000.00 add. principal)
Dec 24 $476,389.25 ($0.00 add. principal)

2025 goal: $1000/mo. add. principal

Jan 25 $474,920.21 ($1,000.00 add. principal)
« Last Edit: January 21, 2025, 12:25:17 PM by lcmac32 »

Freedomin5

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Re: Mortgage Payoff Club!!
« Reply #2607 on: January 02, 2025, 05:30:33 PM »
Original amount: 412k
Apr 2024: 407k
May 2024: 392k
Jun 2024: 377k
Jul 2024: 338k
Sep 2024: 333k
Dec 2024: 323k
Jan 2025: 261k

Made a lump sum payment of ~61k
« Last Edit: January 03, 2025, 04:46:17 PM by Freedomin5 »

Freedomin5

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Re: Mortgage Payoff Club!!
« Reply #2608 on: January 02, 2025, 05:32:05 PM »
$0

Gosh, that feels good to say! I'm not sure if I posted in this thread or not about paying off our mortgage.

Congratulations!

Dutch Comfort

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Re: Mortgage Payoff Club!!
« Reply #2609 on: January 03, 2025, 05:07:44 AM »
Original: 120,000 repayment date 06/01/33
October 2021: 67,000 repayment date 12/01/32 - started the additional payments
April 2022: 60,000 repayment date 04/01/32 - HALFWAY MARK!!!!!
December 2022: EUR 53,000 repayment date 10/01/31
December 2023: EUR 41,000 repayment date 10/01/30
October 2024: EUR 30,000 repayment date 10/01/29 - 75% MARK!!!!!
December 2024: EUR 29,000 repayment date 10/01/29

Goal for 2025: get to EUR 17K, repayment 10/01/28
Stretch goal: full repayment in 2027!

We made the 2024 goal. Now the new goal for 2025 is set. Hope that we can make this again this year (which means double our regular payments!)

BiggerFishToFI

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Re: Mortgage Payoff Club!!
« Reply #2610 on: January 03, 2025, 12:06:14 PM »
Just now joining this thread. We've been remodeling since purchase in June 2024 but are pretty much finished and will be directing any extra cash at this now instead of our taxable brokerage. Just made a $8500 lump sum contribution, which will save us over $500 per year guaranteed for the life of the loan!

We expect to be fully FI once we have this paid off, with a stretch goal being in 3 years. Wish us luck!
 
Original amount: 300k @ 6.625
Aug 2024: 299k
Sep 2024: 299k
Oct 2024: 299k
Nov 2024: 298k
Dec 2024: 298k
Jan 2025: 289K

lcmac32

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Re: Mortgage Payoff Club!!
« Reply #2611 on: January 03, 2025, 12:33:31 PM »
Just now joining this thread. We've been remodeling since purchase in June 2024 but are pretty much finished and will be directing any extra cash at this now instead of our taxable brokerage. Just made a $8500 lump sum contribution, which will save us over $500 per year guaranteed for the life of the loan!

We expect to be fully FI once we have this paid off, with a stretch goal being in 3 years. Wish us luck!
 
Original amount: 300k @ 6.625
Aug 2024: 299k
Sep 2024: 299k
Oct 2024: 299k
Nov 2024: 298k
Dec 2024: 298k
Jan 2025: 289K

This is a fantastic goal.  I have the same rate, but bigger balance.  I want to be done as soon as possible b/c I too believe I could complete the FIRE moment with no MTG.  My pay has been on the rise, so maybe I can get there in 3 (possbile) - 6 (likely) years.

jrhampt

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Re: Mortgage Payoff Club!!
« Reply #2612 on: January 13, 2025, 07:03:07 AM »
Bought house in mid-2023 right around the time my company started doing monthly layoffs and RTO.  Decided to pay off mortgage ASAP to lower fixed costs in preparation for layoff and/or retirement (and interest rate was high, almost 7%). Initial mortgage 435k, but sold other house and then had 235k remaining.  Hit it hard in 2024 and paid off fully in December, managed to survive layoffs (for now), and now rebuilding cash.  Feeling pretty solid for 2025 and beyond.

JupiterGreen

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Re: Mortgage Payoff Club!!
« Reply #2613 on: January 13, 2025, 07:59:39 AM »
Bought house in mid-2023 right around the time my company started doing monthly layoffs and RTO.  Decided to pay off mortgage ASAP to lower fixed costs in preparation for layoff and/or retirement (and interest rate was high, almost 7%). Initial mortgage 435k, but sold other house and then had 235k remaining.  Hit it hard in 2024 and paid off fully in December, managed to survive layoffs (for now), and now rebuilding cash.  Feeling pretty solid for 2025 and beyond.

Congratulations! We paid off our last house and I feel like it was worth it because it allowed us to put so much more into our retirement savings. I get that we could have put the money into retirement savings all along and probably made more $ in the long run, but now that we've sold that house (recently) we get to put the cash proceeds into our new home in a much HCOL area. We would not have had that high down payment amount if we had put it into investments and hadn't paid the house off.

We will close on our new home at the end of the month/feb 2025, we will have a 30yr 329k mortgage at 6.375%. With such a high interest rate we will be working to pay that sucker off. Last time the strategy we used was making extra payments then when it was down to about 70k we just paid that bit off with savings. This time we are going to do it a little differently. I will not be making extra payments to the mortgage company, I will be making them into a high yield savings account and will not put it towards the loan until payoff or until refinance. The reasoning is that at least we'll make some money on the savings interest. It is my understanding that we are paying the interest on the loan first either way and the mortgage payment does not decrease unless you refinance, but please correct me if I'm wrong and I'll rework our strategy!

grantmeaname

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Re: Mortgage Payoff Club!!
« Reply #2614 on: January 13, 2025, 08:12:48 AM »
Do you have a savings account paying more than 6.375%? Otherwise better the pay down the mortgage rather than keep it all to the side.

The benefit to paying down the mortgage quickly is not that your payment goes down each month, it's that it speeds you through the amortization table so that more of each payment goes to principal and less goes to interest (and the difference compounds).
« Last Edit: January 13, 2025, 08:14:50 AM by grantmeaname »

JupiterGreen

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Re: Mortgage Payoff Club!!
« Reply #2615 on: January 13, 2025, 11:34:00 AM »
Do you have a savings account paying more than 6.375%? Otherwise better the pay down the mortgage rather than keep it all to the side.

The benefit to paying down the mortgage quickly is not that your payment goes down each month, it's that it speeds you through the amortization table so that more of each payment goes to principal and less goes to interest (and the difference compounds).

Thank you I appreciate this! If you care to elaborate (I haven't had a mortgage for a minute) I'd appreciate it. Okay I think I get what I was missing, you are saying as the principle goes down the interest amount decreases as well and that it is more advantageous to pay it off that way than to collect it in an account and pay it off all at once, is that right? Again, much appreciated.

jrhampt

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Re: Mortgage Payoff Club!!
« Reply #2616 on: January 13, 2025, 12:21:01 PM »
Do you have a savings account paying more than 6.375%? Otherwise better the pay down the mortgage rather than keep it all to the side.

The benefit to paying down the mortgage quickly is not that your payment goes down each month, it's that it speeds you through the amortization table so that more of each payment goes to principal and less goes to interest (and the difference compounds).

Thank you I appreciate this! If you care to elaborate (I haven't had a mortgage for a minute) I'd appreciate it. Okay I think I get what I was missing, you are saying as the principle goes down the interest amount decreases as well and that it is more advantageous to pay it off that way than to collect it in an account and pay it off all at once, is that right? Again, much appreciated.

It's fun to play around with a mortgage calculator (like bankrate) that shows you the impact of adding extra payments at various times in your mortgage.  Input extra payments at different times, and look at the amortization tables to see what happens and how much interest you end up paying over the life of the loan. Once you do this a bit, you can clearly see what grantmeaname is talking about.

grantmeaname

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Re: Mortgage Payoff Club!!
« Reply #2617 on: January 13, 2025, 02:41:06 PM »
There are not many good calculators out there - in my opinion the best thing is to build yourself a spreadsheet.

The mojnthly interest is your current balance times 6.375%/12 (or .53125%). The rest of the P+I payment is your first month principal balance. Next month, take your old balance minus your principal paydown and do the math again. copy it down 360 rows (or 180 for a 15 year mortgage) and you have just built an amortization table. Then you can see what happens if you add an extra $100 or $1,000, or an extra paycheck payment twice a year if you get 26 paychecks, and you can watch the amortization update in real time.

Here's my mortgage:

JupiterGreen

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Re: Mortgage Payoff Club!!
« Reply #2618 on: January 13, 2025, 05:47:11 PM »
thank you @grantmeaname and @jrhampt this puts it in perspective.

So it sounds like it's better to pay a consistent set amount each month. Very good info, thank you. I will play around with the calculators because I absolutely do not have a spreadsheet mind.

grantmeaname

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Re: Mortgage Payoff Club!!
« Reply #2619 on: January 13, 2025, 05:57:11 PM »
Look how bumpy my payoff has been...It's better to put as many dollars towards your mortgage as possible unless you have something better to do with them that will yield you more than 6.375% (in which case - do that instead!). It doesn't matter if it's the same every month or not.

Lomonossov

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Re: Mortgage Payoff Club!!
« Reply #2620 on: January 14, 2025, 12:14:00 AM »
Hey all!

I'm reporting for duty here. We bought our apartment around a year ago, and after renovating and moving in we started with $192k worth of mortgage. We are now at $181k, with a whooping 7.2% interest rate (welcome to Eastern Europe).

Our strategy is put 50% of our savings to to the market and the other half to prepay the mortgage. Also, every $ we put in the mortgage saves us around .20 in taxes in the next three years. Hopefully we will be almost done by then.

jrhampt

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Re: Mortgage Payoff Club!!
« Reply #2621 on: January 14, 2025, 10:32:24 AM »
Look how bumpy my payoff has been...It's better to put as many dollars towards your mortgage as possible unless you have something better to do with them that will yield you more than 6.375% (in which case - do that instead!). It doesn't matter if it's the same every month or not.

Exactly.  Throw everything you can at it as soon as you can.  I set up my monthly payment to be consistently higher than the minimum, but I also threw the yearly bonus on it, the quarterly dividends, any extra I got from missingmoney.com, escrow refunds, insurance payouts...as soon as it was available, it went toward principal payoff.  Then after I paid off each bit of principal, I got to watch the interest payment portion of the regular mortgage payments decrease.

lcmac32

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Re: Mortgage Payoff Club!!
« Reply #2622 on: January 22, 2025, 10:45:20 AM »
Bought house in mid-2023 right around the time my company started doing monthly layoffs and RTO.  Decided to pay off mortgage ASAP to lower fixed costs in preparation for layoff and/or retirement (and interest rate was high, almost 7%). Initial mortgage 435k, but sold other house and then had 235k remaining.  Hit it hard in 2024 and paid off fully in December, managed to survive layoffs (for now), and now rebuilding cash.  Feeling pretty solid for 2025 and beyond.

This is the way!!!  Well done!!!  Of course the other mortgage club would be right in saying that piling that money in the market through 2024 would have made some nice returns and you could still payoff the mortgage with possibly $40k left over.   Peace of mind over returns won out for you and there is nothing wrong with that.  I hope 2025 is a great year for the market as well now that you are building your reserve again.

I am in the payoff club, but it is always a close call. I am only somewhat aggressive in paying off my mtg.  My current goal is $1,000 add. prin. per month which is at the moment 2x the current amount going to principal in each payment.  I am saving significantly more into investments, but the plan is to keep ramping up the payoff YOY.  My current thought is a 4:1 investing/mtg payoff is about where I want to be.

Just Joe

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Re: Mortgage Payoff Club!!
« Reply #2623 on: January 30, 2025, 03:03:02 PM »
~$235K left at 3.5%.

We've been making payments @1.7x the required mortgage payment for sometime.

The recent news cycle topics makes us wish we were all paid off. Our jobs aren't in danger but we both really prefer a stronger sense of security that recent events have dinged up.   

Could sell it for more than we paid for it according to Zillow. Not planning to relocate. The mortgage payoff is racing our retirement plans. Payoff first, retire second.



Edited for clarity
« Last Edit: January 30, 2025, 08:24:54 PM by Just Joe »

partgypsy

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Re: Mortgage Payoff Club!!
« Reply #2624 on: February 03, 2025, 01:27:21 PM »
This weekend did my taxes and paid off my mortgage. I will still need to reserve 6-7k yearly for property taxes and insurance. But one less bill and mental victory. It will also allow me to better estimate how much money I will need in retirement.
« Last Edit: February 03, 2025, 01:29:18 PM by partgypsy »

FIGardengrl

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Re: Mortgage Payoff Club!!
« Reply #2625 on: February 03, 2025, 02:43:42 PM »
Closing out the year at €64473.

If anyone has cute ideas for a countdown tracker (on paper or digital), please let me know!

53k left at 3.0% for us.  I am boring and have our mortgage balance as a simple graph, dollars on the x axis and years/months on the y. Visually very effective though when posted on the wall.

OTOH my countdown to retirement is a paper chain like the ones I made for Advent as a child. One link for every week left, tear it off on Saturdays. And a second chain for the number of night shifts (which I cannot stand to do anymore)

lcmac32

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Re: Mortgage Payoff Club!!
« Reply #2626 on: February 03, 2025, 05:50:24 PM »
This weekend did my taxes and paid off my mortgage. I will still need to reserve 6-7k yearly for property taxes and insurance. But one less bill and mental victory. It will also allow me to better estimate how much money I will need in retirement.

Big CONGRATULATIONS!!!  Well done!

grantmeaname

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Re: Mortgage Payoff Club!!
« Reply #2627 on: February 03, 2025, 06:30:47 PM »
Congrats! Huge W!

Sandi_k

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Re: Mortgage Payoff Club!!
« Reply #2628 on: February 03, 2025, 09:48:16 PM »
This weekend did my taxes and paid off my mortgage. I will still need to reserve 6-7k yearly for property taxes and insurance. But one less bill and mental victory. It will also allow me to better estimate how much money I will need in retirement.

Whoo-hoo! Way to go!

Trifle

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Re: Mortgage Payoff Club!!
« Reply #2629 on: February 04, 2025, 03:02:55 AM »
This weekend did my taxes and paid off my mortgage. I will still need to reserve 6-7k yearly for property taxes and insurance. But one less bill and mental victory. It will also allow me to better estimate how much money I will need in retirement.

Congratulations!!!!!

monarda

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Re: Mortgage Payoff Club!!
« Reply #2630 on: February 06, 2025, 10:00:55 PM »
We have 3 mortgages.
Two won't be paid off for a while, (one is at 2.25%, one is at 3%)
but one... now the balance is now $49,435.

Less than 5 years to go. :-)

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

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

Rental mortgage balance $23,955 (4% interest)
Credit card balance (0% until May and December of this year) $20,729, will pay off when promo ends




Nederstash

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Re: Mortgage Payoff Club!!
« Reply #2631 on: February 08, 2025, 10:05:24 AM »
This weekend did my taxes and paid off my mortgage. I will still need to reserve 6-7k yearly for property taxes and insurance. But one less bill and mental victory. It will also allow me to better estimate how much money I will need in retirement.

Wonderful!! Very well done, what an achievement!

AFrugalGuy

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Re: Mortgage Payoff Club!!
« Reply #2632 on: February 08, 2025, 01:46:21 PM »
Original loan amount: $656,000.00

December 31, 2023: $497,758.27
December 31, 2024: $409,737.04
January 31, 2025: $403,846.93
« Last Edit: February 08, 2025, 01:48:53 PM by AFrugalGuy »

channtheman

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Re: Mortgage Payoff Club!!
« Reply #2633 on: February 08, 2025, 05:23:20 PM »
Bought house in mid-2023 right around the time my company started doing monthly layoffs and RTO.  Decided to pay off mortgage ASAP to lower fixed costs in preparation for layoff and/or retirement (and interest rate was high, almost 7%). Initial mortgage 435k, but sold other house and then had 235k remaining.  Hit it hard in 2024 and paid off fully in December, managed to survive layoffs (for now), and now rebuilding cash.  Feeling pretty solid for 2025 and beyond.

This is the way!!!  Well done!!!  Of course the other mortgage club would be right in saying that piling that money in the market through 2024 would have made some nice returns and you could still payoff the mortgage with possibly $40k left over.   Peace of mind over returns won out for you and there is nothing wrong with that.  I hope 2025 is a great year for the market as well now that you are building your reserve again.

I am in the payoff club, but it is always a close call. I am only somewhat aggressive in paying off my mtg.  My current goal is $1,000 add. prin. per month which is at the moment 2x the current amount going to principal in each payment.  I am saving significantly more into investments, but the plan is to keep ramping up the payoff YOY.  My current thought is a 4:1 investing/mtg payoff is about where I want to be.

For my wife and me, paying extra towards the mortgage motivated both of us to scrimp and save more and to work more overtime hours at work.  I know that the motivation to do those things would not exist if we simply were putting that money in the stock market, and it really accelerated our mortgage payoff.   This is something that I've never really seen discussed and that is not accounted for in the discussion.  I doubt I would have the motivation to work 60 hour weeks for 10 years to simply invest that money.  However, doing that for 2-3 years and seeing the mortgage balance go down and then paying it off was incredibly motivating.

partgypsy

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Re: Mortgage Payoff Club!!
« Reply #2634 on: February 10, 2025, 11:34:50 AM »
Thanks everyone! I may have lived my life a little more modestly than some. But it is true it is some mental relief/security i made it so my I reached a point my overhead costs are lower. :)

partgypsy

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Re: Mortgage Payoff Club!!
« Reply #2635 on: February 10, 2025, 11:38:43 AM »
Bought house in mid-2023 right around the time my company started doing monthly layoffs and RTO.  Decided to pay off mortgage ASAP to lower fixed costs in preparation for layoff and/or retirement (and interest rate was high, almost 7%). Initial mortgage 435k, but sold other house and then had 235k remaining.  Hit it hard in 2024 and paid off fully in December, managed to survive layoffs (for now), and now rebuilding cash.  Feeling pretty solid for 2025 and beyond.

This is the way!!!  Well done!!!  Of course the other mortgage club would be right in saying that piling that money in the market through 2024 would have made some nice returns and you could still payoff the mortgage with possibly $40k left over.   Peace of mind over returns won out for you and there is nothing wrong with that.  I hope 2025 is a great year for the market as well now that you are building your reserve again.

I am in the payoff club, but it is always a close call. I am only somewhat aggressive in paying off my mtg.  My current goal is $1,000 add. prin. per month which is at the moment 2x the current amount going to principal in each payment.  I am saving significantly more into investments, but the plan is to keep ramping up the payoff YOY.  My current thought is a 4:1 investing/mtg payoff is about where I want to be.

For my wife and me, paying extra towards the mortgage motivated both of us to scrimp and save more and to work more overtime hours at work.  I know that the motivation to do those things would not exist if we simply were putting that money in the stock market, and it really accelerated our mortgage payoff.   This is something that I've never really seen discussed and that is not accounted for in the discussion.  I doubt I would have the motivation to work 60 hour weeks for 10 years to simply invest that money.  However, doing that for 2-3 years and seeing the mortgage balance go down and then paying it off was incredibly motivating.
what is mathematically optimal is sometimes what is not psychologically motivating,optimal. Especially the last couple years it was easier for me to forgo things by thinking that's = month off the mortgage, vs some % towards retirement. I know I will need to create a new concrete goal to work on. For me that will be a certain amount in emergency, as that is underfunded esp in the current situation

Trifle

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Re: Mortgage Payoff Club!!
« Reply #2636 on: February 11, 2025, 03:11:30 AM »
Bought house in mid-2023 right around the time my company started doing monthly layoffs and RTO.  Decided to pay off mortgage ASAP to lower fixed costs in preparation for layoff and/or retirement (and interest rate was high, almost 7%). Initial mortgage 435k, but sold other house and then had 235k remaining.  Hit it hard in 2024 and paid off fully in December, managed to survive layoffs (for now), and now rebuilding cash.  Feeling pretty solid for 2025 and beyond.

This is the way!!!  Well done!!!  Of course the other mortgage club would be right in saying that piling that money in the market through 2024 would have made some nice returns and you could still payoff the mortgage with possibly $40k left over.   Peace of mind over returns won out for you and there is nothing wrong with that.  I hope 2025 is a great year for the market as well now that you are building your reserve again.

I am in the payoff club, but it is always a close call. I am only somewhat aggressive in paying off my mtg.  My current goal is $1,000 add. prin. per month which is at the moment 2x the current amount going to principal in each payment.  I am saving significantly more into investments, but the plan is to keep ramping up the payoff YOY.  My current thought is a 4:1 investing/mtg payoff is about where I want to be.

For my wife and me, paying extra towards the mortgage motivated both of us to scrimp and save more and to work more overtime hours at work.  I know that the motivation to do those things would not exist if we simply were putting that money in the stock market, and it really accelerated our mortgage payoff.   This is something that I've never really seen discussed and that is not accounted for in the discussion.  I doubt I would have the motivation to work 60 hour weeks for 10 years to simply invest that money.  However, doing that for 2-3 years and seeing the mortgage balance go down and then paying it off was incredibly motivating.
what is mathematically optimal is sometimes what is not psychologically motivating,optimal. Especially the last couple years it was easier for me to forgo things by thinking that's = month off the mortgage, vs some % towards retirement. I know I will need to create a new concrete goal to work on. For me that will be a certain amount in emergency, as that is underfunded esp in the current situation

It was the same for us when we were paying off the mortgage.  It was SO MUCH more motivating to see that progress than an increasing investment balance.  We went all in on the payoff -- tooth-and-nails aggressive, scrounging for extra $ wherever we could find it and throwing it at the mortgage to get free of it.  None of our other saving or investing has been like that. 

talltexan

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Re: Mortgage Payoff Club!!
« Reply #2637 on: February 11, 2025, 12:39:01 PM »
@JupiterGreen , I think others have explained this in different ways, but when you add extra money on top of your mortgage payments, it moves you down the amortization table, so even though the amount of your payment due stays the same, the portion of that payment going towards principal increases.

I agree--with a rate exceeding 6%--that you're better off making the extra payment towards principal immediately rather than holding it in an investment or a savings account.

Do you have a savings account paying more than 6.375%? Otherwise better the pay down the mortgage rather than keep it all to the side.

The benefit to paying down the mortgage quickly is not that your payment goes down each month, it's that it speeds you through the amortization table so that more of each payment goes to principal and less goes to interest (and the difference compounds).

Thank you I appreciate this! If you care to elaborate (I haven't had a mortgage for a minute) I'd appreciate it. Okay I think I get what I was missing, you are saying as the principle goes down the interest amount decreases as well and that it is more advantageous to pay it off that way than to collect it in an account and pay it off all at once, is that right? Again, much appreciated.