Mortgage Payoff Club!!

[sonnys]

Hi,

I have been really going back and forth on paying off the mortgage early or using the money to purchase extra income properties.  I have read about and discussed the HELOC method on other threads and wanted to bring it up again.  Speaking mathematically, the investment option makes more sense, but the heart wants to payoff the 30 year mortgage.  I believe with my current savings and savings rate I could pay off the mortgage in 6 years but at a cost of not acquiring any properties during that time which I don't like either.  Here is the calculator ("All in One" - needs Flash plugin) if you want to test for your financials -     

www.cmgfi.com/consumers/calculators

I think I have 3 options:

1. Use savings towards primary mortgage.  Any additional savings go towards payoff.
2. Use the savings and savings rate to purchase an investment property every year for 10 years a la "The Millionaire Real Estate Investor".
3. Use my savings to purchase an investment property outright and open a HELOC against it to use as a rainy day fund for emergencies.  I can then use the cash flow from rent to save money and buy another rental property in a year or two. 

It really bothers me that I have a 30 year mortgage and have money in the savings account earning nothing.  I don't want to buy multiple properties at the same time because I am still a novice and would like to go slow and do a "dollar cost averaging" method in real estate investing.  I think that the last option seems like a balanced approach to earning a better rate on my savings and still have flexibility for an emergency.  I have a 401K but I really have no faith left in the markets, especially over a short term.

I would appreciate any feedback.

Thanks,
Sonny

[K-ice]

I think I have 3 options:

1. Use savings towards primary mortgage.  Any additional savings go towards payoff.
2. Use the savings and savings rate to purchase an investment property every year for 10 years a la "The Millionaire Real Estate Investor".
3. Use my savings to purchase an investment property outright and open a HELOC against it to use as a rainy day fund for emergencies.  I can then use the cash flow from rent to save money and buy another rental property in a year or two. 

I would appreciate any feedback.

How about these steps?

1) Use your savings to pay off your primary mortgage. 
2) Then take out a HELOC on your primary.
3)  Use primary HELOC to purchase a rental "cash" when a good rental deal becomes available.   
4) Then get a mortgage/HELOC on your rental once the crazy purchase time has passed & you can shop for the best rate without stress. 
5) Now pay off your HELOC on your house
6) Repeat steps 3-5 to get a second rental, once you are comfortable being a landlord.

Especially in Canada, the tax savings of paying off your own property with cash vs the rental can save thousands a year. We can only write off mortgage interest on Rentals.

[couponvan]

$17,319 as of today remaining on the FIRE house.  Still trying to convince DH we should just pay the sucker off with available cash....

WE DID IT!!!! TODAY WE WIRED $17,327.01 TO THE BANK AND WE ARE MORTGAGE-FREE ON THE FIRE HOUSE. WOO HOO!!!

(The small extra amount is for recording deeds....)

[Neustache]

Congrats, Couponvan!!

[couponvan]

Congrats, Couponvan!!

Thank you!

Congrats! Still hasn't really hit us yet. I'd be curious how long it took others who graduated the "club" to feel a difference.

My wife listens to Dave Ramsey for entertainment value most days and he always says you can walk around barefoot in the grass and it feels different. 

We literally tried that haha.  Nothing.

We're happy we did it, we are "excited" i guess, but it doesn't feel any different.

I expect next month it will feel nice to transfer that mortgage payment into the kids' college funds to see those grow. When they were born, we had visions of huge college funds.  I'm at least glad we didn't put off retirement funds....

[Lmoot]

Hi,

I have been really going back and forth on paying off the mortgage early or using the money to purchase extra income properties.  I have read about and discussed the HELOC method on other threads and wanted to bring it up again.  Speaking mathematically, the investment option makes more sense, but the heart wants to payoff the 30 year mortgage.  I believe with my current savings and savings rate I could pay off the mortgage in 6 years but at a cost of not acquiring any properties during that time which I don't like either.  Here is the calculator ("All in One" - needs Flash plugin) if you want to test for your financials -     

www.cmgfi.com/consumers/calculators

I think I have 3 options:

1. Use savings towards primary mortgage.  Any additional savings go towards payoff.
2. Use the savings and savings rate to purchase an investment property every year for 10 years a la "The Millionaire Real Estate Investor".
3. Use my savings to purchase an investment property outright and open a HELOC against it to use as a rainy day fund for emergencies.  I can then use the cash flow from rent to save money and buy another rental property in a year or two. 

It really bothers me that I have a 30 year mortgage and have money in the savings account earning nothing.  I don't want to buy multiple properties at the same time because I am still a novice and would like to go slow and do a "dollar cost averaging" method in real estate investing.  I think that the last option seems like a balanced approach to earning a better rate on my savings and still have flexibility for an emergency.  I have a 401K but I really have no faith left in the markets, especially over a short term.

I would appreciate any feedback.

Thanks,
Sonny

Using all of your funds to pay cash on a rental...then waiting several years while saving up for another one is a lot of money you're not earning in those several years from rent. I say buy one rental, when you have a renter and costs have settled down, buy your second rental. At least make the cash work for 2 rentals. That way you have the renters paying down the mortgage, instead of using your savings. Also, the sooner you get renters, the quicker you can begin to apply the cash flow towards your income when applying for multiple mortgages....usually they won't do it until you have been receiving rental income for at least 2 years.

I'd be hesitant at using a HELOC on my primary for the rental property expenses. I'd rather risk one of the rentals than my personal property. But that's just a matter of tolerance of personal risk. Keep enough of the savings on hand to act as an efund (separate from your personal efund). Then when one of your rentals gains enough equity, take a HELOC out on that. Leave your personal residence out of it, is my opinion.

[write_stuff]

I want in the club!

We bought our 375,000 house last September with 100,000 down and a 275,000 mortgage at 4.125%.

We are set up to pay biweekly payments, and starting in January we've been paying 1000 extra to the principle per month. That's already cut 6 years off the loan!

[K-ice]

I want in the club!
...

 That's already cut 6 years off the loan!

Welcome! That's a great start.

[couponvan]

I want in the club!

We bought our 375,000 house last September with 100,000 down and a 275,000 mortgage at 4.125%.

We are set up to pay biweekly payments, and starting in January we've been paying 1000 extra to the principle per month. That's already cut 6 years off the loan!

Hello!  It sounds like you are doing all the "write stuff"!

[JourneyToLaunch]

Hi,

I have been really going back and forth on paying off the mortgage early or using the money to purchase extra income properties.  I have read about and discussed the HELOC method on other threads and wanted to bring it up again.  Speaking mathematically, the investment option makes more sense, but the heart wants to payoff the 30 year mortgage.  I believe with my current savings and savings rate I could pay off the mortgage in 6 years but at a cost of not acquiring any properties during that time which I don't like either.  Here is the calculator ("All in One" - needs Flash plugin) if you want to test for your financials -     

www.cmgfi.com/consumers/calculators

I think I have 3 options:

1. Use savings towards primary mortgage.  Any additional savings go towards payoff.
2. Use the savings and savings rate to purchase an investment property every year for 10 years a la "The Millionaire Real Estate Investor".
3. Use my savings to purchase an investment property outright and open a HELOC against it to use as a rainy day fund for emergencies.  I can then use the cash flow from rent to save money and buy another rental property in a year or two. 

It really bothers me that I have a 30 year mortgage and have money in the savings account earning nothing.  I don't want to buy multiple properties at the same time because I am still a novice and would like to go slow and do a "dollar cost averaging" method in real estate investing.  I think that the last option seems like a balanced approach to earning a better rate on my savings and still have flexibility for an emergency.  I have a 401K but I really have no faith left in the markets, especially over a short term.

I would appreciate any feedback.

Thanks,
Sonny

So my husband agreed to putting $5K in from his extra jobs in addition to the $10K from my annual bonus every year to paying down the mortgage. However, I have thought of another strategy and want to get your wise  opinions.

What about instead of putting $15K a year towards the mortgage directly, we put it into a index fund/mutual account and at the end of the 7 years, decide what we want to do with the money from there. We will still be paying $800 a month towards the mortgage on a monthly basis (which gets the mortgage paid off by the time we are 48) but it seems like putting the $15K each year in an investment account allows us more flexibility. If in 7 years, we want to take all of the money and pay off the mortgage we can, or we can put it towards something else. Thoughts? I also posted more details on my blog but it doesn't get much traffic yet and I would like direct responses.

[Indio]

Hi,

I have been really going back and forth on paying off the mortgage early or using the money to purchase extra income properties.  I have read about and discussed the HELOC method on other threads and wanted to bring it up again.  Speaking mathematically, the investment option makes more sense, but the heart wants to payoff the 30 year mortgage.  I believe with my current savings and savings rate I could pay off the mortgage in 6 years but at a cost of not acquiring any properties during that time which I don't like either.  Here is the calculator ("All in One" - needs Flash plugin) if you want to test for your financials -     

www.cmgfi.com/consumers/calculators

I think I have 3 options:

1. Use savings towards primary mortgage.  Any additional savings go towards payoff.
2. Use the savings and savings rate to purchase an investment property every year for 10 years a la "The Millionaire Real Estate Investor".
3. Use my savings to purchase an investment property outright and open a HELOC against it to use as a rainy day fund for emergencies.  I can then use the cash flow from rent to save money and buy another rental property in a year or two. 

It really bothers me that I have a 30 year mortgage and have money in the savings account earning nothing.  I don't want to buy multiple properties at the same time because I am still a novice and would like to go slow and do a "dollar cost averaging" method in real estate investing.  I think that the last option seems like a balanced approach to earning a better rate on my savings and still have flexibility for an emergency.  I have a 401K but I really have no faith left in the markets, especially over a short term.

I would appreciate any feedback.

Thanks,
Sonny

So my husband agreed to putting $5K in from his extra jobs in addition to the $10K from my annual bonus every year to paying down the mortgage. However, I have thought of another strategy and want to get your wise  opinions.

What about instead of putting $15K a year towards the mortgage directly, we put it into a index fund/mutual account and at the end of the 7 years, decide what we want to do with the money from there. We will still be paying $800 a month towards the mortgage on a monthly basis (which gets the mortgage paid off by the time we are 48) but it seems like putting the $15K each year in an investment account allows us more flexibility. If in 7 years, we want to take all of the money and pay off the mortgage we can, or we can put it towards something else. Thoughts? I also posted more details on my blog but it doesn't get much traffic yet and I would like direct responses.

A lot of people prefer to go the route of putting the money into investments and then using that to pay off the mortgage. You need to consider the 7% market growth potential vs the guaranteed return of reducing interest payments.
One of the advantages of investing the money is that you still have access to it and it isn't tied up in a mortgage. This way if you have an emergency, like a layoff, you still have funds to live on and pay the mortgage. Keep in mind the bank still wants to get paid monthly, even if you have paid down the balance. Lots of threads on here about that.

[JourneyToLaunch]

Hi,

I have been really going back and forth on paying off the mortgage early or using the money to purchase extra income properties.  I have read about and discussed the HELOC method on other threads and wanted to bring it up again.  Speaking mathematically, the investment option makes more sense, but the heart wants to payoff the 30 year mortgage.  I believe with my current savings and savings rate I could pay off the mortgage in 6 years but at a cost of not acquiring any properties during that time which I don't like either.  Here is the calculator ("All in One" - needs Flash plugin) if you want to test for your financials -     

www.cmgfi.com/consumers/calculators

I think I have 3 options:

1. Use savings towards primary mortgage.  Any additional savings go towards payoff.
2. Use the savings and savings rate to purchase an investment property every year for 10 years a la "The Millionaire Real Estate Investor".
3. Use my savings to purchase an investment property outright and open a HELOC against it to use as a rainy day fund for emergencies.  I can then use the cash flow from rent to save money and buy another rental property in a year or two. 

It really bothers me that I have a 30 year mortgage and have money in the savings account earning nothing.  I don't want to buy multiple properties at the same time because I am still a novice and would like to go slow and do a "dollar cost averaging" method in real estate investing.  I think that the last option seems like a balanced approach to earning a better rate on my savings and still have flexibility for an emergency.  I have a 401K but I really have no faith left in the markets, especially over a short term.

I would appreciate any feedback.

Thanks,
Sonny

So my husband agreed to putting $5K in from his extra jobs in addition to the $10K from my annual bonus every year to paying down the mortgage. However, I have thought of another strategy and want to get your wise  opinions.

What about instead of putting $15K a year towards the mortgage directly, we put it into a index fund/mutual account and at the end of the 7 years, decide what we want to do with the money from there. We will still be paying $800 a month towards the mortgage on a monthly basis (which gets the mortgage paid off by the time we are 48) but it seems like putting the $15K each year in an investment account allows us more flexibility. If in 7 years, we want to take all of the money and pay off the mortgage we can, or we can put it towards something else. Thoughts? I also posted more details on my blog but it doesn't get much traffic yet and I would like direct responses.

A lot of people prefer to go the route of putting the money into investments and then using that to pay off the mortgage. You need to consider the 7% market growth potential vs the guaranteed return of reducing interest payments.
One of the advantages of investing the money is that you still have access to it and it isn't tied up in a mortgage. This way if you have an emergency, like a layoff, you still have funds to live on and pay the mortgage. Keep in mind the bank still wants to get paid monthly, even if you have paid down the balance. Lots of threads on here about that.

Thanks for the feedback. I think we are going to go with putting the lump sums of the cash in investments for the next few years and see how things turn out from there.

[BlueHouse]

Hi,

I have been really going back and forth on paying off the mortgage early or using the money to purchase extra income properties.  I have read about and discussed the HELOC method on other threads and wanted to bring it up again.  Speaking mathematically, the investment option makes more sense, but the heart wants to payoff the 30 year mortgage.  I believe with my current savings and savings rate I could pay off the mortgage in 6 years but at a cost of not acquiring any properties during that time which I don't like either.  Here is the calculator ("All in One" - needs Flash plugin) if you want to test for your financials -     

www.cmgfi.com/consumers/calculators

I think I have 3 options:

1. Use savings towards primary mortgage.  Any additional savings go towards payoff.
2. Use the savings and savings rate to purchase an investment property every year for 10 years a la "The Millionaire Real Estate Investor".
3. Use my savings to purchase an investment property outright and open a HELOC against it to use as a rainy day fund for emergencies.  I can then use the cash flow from rent to save money and buy another rental property in a year or two. 

It really bothers me that I have a 30 year mortgage and have money in the savings account earning nothing.  I don't want to buy multiple properties at the same time because I am still a novice and would like to go slow and do a "dollar cost averaging" method in real estate investing.  I think that the last option seems like a balanced approach to earning a better rate on my savings and still have flexibility for an emergency.  I have a 401K but I really have no faith left in the markets, especially over a short term.

I would appreciate any feedback.

Thanks,
Sonny

So my husband agreed to putting $5K in from his extra jobs in addition to the $10K from my annual bonus every year to paying down the mortgage. However, I have thought of another strategy and want to get your wise  opinions.

What about instead of putting $15K a year towards the mortgage directly, we put it into a index fund/mutual account and at the end of the 7 years, decide what we want to do with the money from there. We will still be paying $800 a month towards the mortgage on a monthly basis (which gets the mortgage paid off by the time we are 48) but it seems like putting the $15K each year in an investment account allows us more flexibility. If in 7 years, we want to take all of the money and pay off the mortgage we can, or we can put it towards something else. Thoughts? I also posted more details on my blog but it doesn't get much traffic yet and I would like direct responses.

A lot of people prefer to go the route of putting the money into investments and then using that to pay off the mortgage. You need to consider the 7% market growth potential vs the guaranteed return of reducing interest payments.
One of the advantages of investing the money is that you still have access to it and it isn't tied up in a mortgage. This way if you have an emergency, like a layoff, you still have funds to live on and pay the mortgage. Keep in mind the bank still wants to get paid monthly, even if you have paid down the balance. Lots of threads on here about that.

I did this for a few years.  Then when the market reached an all-time high AND I wanted to reallocate, I chose to reallocate from that sinking fund into the mortgage.  I plan to add one more chunk to the principal before I recast the mortgage balance.

[Heckler]

Congrats! Still hasn't really hit us yet. I'd be curious how long it took others who graduated the "club" to feel a difference.

I immediately started saving $5k/ month to my TFSA account (tax refund and bonus season), and have ratcheted my RRSP contributions to 40% straight off my pay, reducing income taxes nicely.  Still trying to figure out the fine balance line of investing 70% of income and having enough to cover the bills without dipping into cash savings.   I've used the principles from YNAB to forecast expenses and pay dates two months out, allowing me to maximize investments as soon as we can afford it.

In life we haven't noticed a difference at all, except my work is trying harder to keep me from leaving than I am afraid of a layoff.  I'm curious if payroll talks to HR.

[Faraday]

A lot of people prefer to go the route of putting the money into investments and then using that to pay off the mortgage. You need to consider the 7% market growth potential vs the guaranteed return of reducing interest payments.
One of the advantages of investing the money is that you still have access to it and it isn't tied up in a mortgage. This way if you have an emergency, like a layoff, you still have funds to live on and pay the mortgage. Keep in mind the bank still wants to get paid monthly, even if you have paid down the balance. Lots of threads on here about that.

I did this for a few years.  Then when the market reached an all-time high AND I wanted to reallocate, I chose to reallocate from that sinking fund into the mortgage.  I plan to add one more chunk to the principal before I recast the mortgage balance.

BlueHouse, I'm tracking almost exactly along with you. (not on amount, but strategy).  I will recast sometime in May. (We get only one, so I've been working to exhaust all possible options for paying down the principal.)

When the market is low, I push more toward the market. When the market is high, I push more toward the mortgage.  IMHO, this is just good portfolio management!

[FerrumB5]

Might be off-topic. Anyone here who were transferred from Flagstar to Regions? I can't establish an account at Regions, when I call they say - do it after May1st (which is my pay day), which makes me wonder if it screws my credit history etc.

[pdxmonkey]

Jan. 2015 - ~100k
Oct. 2015 - ~$67500
Dec.3, 2015 - ~$60k
Feb. 5, 2016 - $52,108.53
March 7, 2016 - 49,774.21
April 11, 2016 - 48,700 to go. Had to pay taxes this month.

April 25 - 47,500 to go. Figured out all the other bills,taxes,etc and had enough to pay a bit more down.

[rjbf65]

I'll join.

Started June 2014 at 71k.

It's currently $55k.  Goal is to finish it off by next June.   Have 20k in cash that would finish it off by then.  We are currently investing 15% as well.   Basically doing the Dave Ramsey plan.

Currently down to $51,500.  Hoping to get under $50K a month from today.

Down to $49660.  Was able to throw an extra $1555 at it this time.  Budgeting to be able to throw an extra $2500 next month.

$46,950 -- a $2,710 reduction this month.  October should be a little better with the magic of the 3 paychecks for me this month.  Should be under $40K by end of the year.

$41,843 -- a $5,107 reduction this month.  The 3rd paycheck was big this time.  Would love to be able to do that every month!  My goal for end of November is to get under 40K.  Once I'm at the $40K mark, I'll have about equal amounts of cash in the bank and mortgage balance.  Still also maxing out 2 Roth IRA's which speaks for $917 per month.  It is always tempting to stop the Roth or to throw a bunch of the available cash at it.  I think I'll just stay the course of throwing all the extra cash that was left over after the month at it.  Once the mortgage is gone, all towards investing.

$38,922 -- $2,921 reduction this month.  More travel and eating out this month, as well as property taxes and insurance slowed us down a bit.  But we are at the goal of being under $40K balance!  It's going down at a pretty good pace that I'm happy with!  We will have some Christmas expenses coming up this month but it shouldn't be all that bad.  My target is to hope to be under $37K at the end of December.

$35,898 -- $3,024 reduction this month.  Received a small bonus from work to more or less cancel out Christmas spending.  Also had to replace the wife's windshield.  Would love to be down to under $33K after January is up.  Have quite a few things on the horizon.  We are expecting our first child in late May.  With that we are planning on upgrading the vehicle fleet some.  While going from 3 vehicles to 2.  Just looking for more room and reliability.  Need to have the ability of hauling a child, 2 dogs, and luggage for trips to see our parents.  We have been on the mustachian side of things when it comes to vehicles.  Our 3 vehicles combined might be worth about 9 or 10K.  My goal is to have a paid for house as well as having atleast 1 newer vehicle also paid for by the time the baby arrives.  We are now at the position of having more cash than mortgage balance.  Really looking forward to knocking it out asap!  Another thing about having it paid off by the end of May is I'll finally be eligible to contribute to my 401K starting in July.  Would be wonderful to max out a 401K in just the remaining half of the year!

$32,026 -- a $3,872 reduction this month.  I always have to wait until the 5th or 6th of each month to process my extra payment.  I'm one of those weird ones that pay things as soon as I get the notice instead of holding on to the money for as long as possible.  If all goes well February and March have the potential to be good debt reduction months.  Tax refund in February hopefully and a 3 paycheck month in March.  We will be doing some vehicle upgrading with a new baby on the way but I will do everything I can to keep that cost to a minimum.

$31,609 --  a $417 reduction... I only made the normal payment this month and putting the agressive paydown on hold.  Some big possible life changes on the horizon and I want to have as much cash in the bank as possible just in case.  After the dust settles is when I'll finish it off.

$31,190 -- $419 reduction .. Another minimum payment.  Will be spending about $15K out of pocket upgrading the worn down vehicle fleet and adding room for the new baby next month.  Hope to finish off the mortgage by the end of 2016 or before.  Looking forward to getting the baby home and healthy and pressing reset on the paydown plan that we were doing so well at before.   

[dandypandys]

$27, 116 to go!!!!! So Exciting.

Mortgage
Balance
$25,478.56

couldn't help myself- put 5k in from our savings so down to 20,478.56 now! Can't wait to be in the teens!

wooohooo just got paid, and a few extras- so just dumped a bunch in!
Now at $17678.00 Mortgage payment comes off in a few days too- should take us to 16k something yayayay

[asauer]

Yes!  $71,000 as of today!  Going to get a couple of side hustle checks in the next couple of weeks and am hoping to be able to knock that sucker down to the 60's!

[BlueHouse]

I can see how this gets exciting when you start getting close to zero.  I still have a really long way to go, so it's hard for me to get excited unless I'm making big dumps.  I am going to try to pass another x00,000 on the house-odometer before the summer though.  So I'll look forward to that!
Congratulations to those making great progress.  It really is inspirational.

[Monocle Money Mouth]

I can see how this gets exciting when you start getting close to zero.  I still have a really long way to go, so it's hard for me to get excited unless I'm making big dumps.  I am going to try to pass another x00,000 on the house-odometer before the summer though.  So I'll look forward to that!
Congratulations to those making great progress.  It really is inspirational.

Don't get discouraged! Just try to break your mortgage payoff down in to mini goals. We used to use getting to the next $10,000 dollar mark as a goal (Going from $90,000 to $80,000). We also used the goal getting the principal portion of your mortgage payment up to a certain value (If we pay this much extra principal, the monthly principal goes up to $800). It makes it a lot easier to stay focused on the big goal if you have some smaller milestones along the way.

[PFHC]

Mar 2016: $126,942

Apr 2016:$126,644

[SAfAmBrit]

Principal paid off so far

2012 - $3415
2013 - $3994
2014 - $8483
2015 - $38412 (yup got rid of all the debt and $10 000 windfall not expected)
2016 - $27707 so far

3/1 Remaining balance $87322. Projected pay off date 09/09/2017 - SO 51st birthday.

4/1 Remaining balance $81837

4/30 Remaining balance $76952 (I owed the tax man!)

[Threshkin]

Just a fun realization that the mortgage would have been due today had we not paid it off last month.

It is a glorious feeling isn't it?

[Comar]

I'm joining in.

I have a house in Iceland. Bought it for 123k dollars (16.5 million icelandic crowns) in 2012. Started making extra payments early last year and am now down to 88.4k dollars. Currently I throw about 560 dollars at it each month. I have also thrown some extra cash at the mortage, such as tax repayments and such.

From the start I have used the strategy of adding to the payments each month. Each downpayment reduces the monthly mortage payment so for the next downpayment I have added the extra dollars the mortage payment has been reduced. Call it a snowball strategy?

My goal is to KO the mortage in 5 years. I'm turning 30 this month and want it finished before I turn 35.

87.5 k left. Paid 562 extra this month.

82.8k left.

[couponvan]

Just a fun realization that the mortgage would have been due today had we not paid it off last month.

Us too, except we have a bunch of deferred maintenance items we are now tackling. But at least they will be at a minimum 4.6% discount because we waited to do them! :-) We're using the $1,500/month for those items and should be done in about 1 year.  Hopefully after that there will be very little big maintenance for 7-10 years.

[Heckler]

Keep up the great work everyone!  You'll realize it's worth it when you can max your TFSA in three months!  (as in, take it from $35k to $50k in $5k increments!)

[Monocle Money Mouth]

I'm proud to announce I am a member of the exclusive Mortgage Payoff Club :) We just paid the last of it off today. My initial plan was to get it paid off near the end of 2018. I got my wife on board and we pretty much obliterated it over the last 5 months using bonus money, money from a closed CD that was paying nothing, and whatever else we cold afford to throw at it every month. We finally got the balance down low enough that we felt it made sense to raid our savings and just finish it off for good. I estimate we have saved $100,000 in interest. Not a trivial sum of money.

So what are we going to do with our freed up cash flow? We're still going to throw money in a savings account to cover taxes, insurance, and house repairs. We are bumping up our retirement account contributions. I've already doubled my 401k contribution from 10% to 20%. My wife is stuck with a Simple IRA, but she is going to try to max that out for the year but we need to calculate the new percentage first. I will be working on rebuilding my emergency fund also. We will also be fixing up  and replacing some things around the house we have been neglecting.

I don't anticipate any lifestyle inflation, but we are going to do some things we have been holding off on. I'm going to replace my office chair and my wife is getting herself a new bicycle. We're also going to take a nice vacation next year to celebrate our 10 year anniversary. Other than that, I still intend to clip coupons, look for the best value, and be happy with less.

For everyone else out there still working on your mortgage, keep up the great work. It will be worth it when you can finally start funneling those mortgage funds into saving and investing for the future.

[Monocle Money Mouth]

For everyone else out there still working on your mortgage, keep up the great work. It will be worth it when you can finally start funneling those mortgage funds into saving and investing for the future.

Congrats! & thanks for the encouragement!

Still plugging away here in one of Canada's most HCOL cities, hoping to be mortgage-free in 2018. About to hit the 5-figure club, so that will be an exciting milestone!

Keep up the great work everyone!  You'll realize it's worth it when you can max your TFSA in three months!  (as in, take it from $35k to $50k in $5k increments!)

Really looking forward to that day! :)

You're welcome! Getting under $100,000 was what finally made it seem possible to get rid of our mortgage. My only regret was not working harder on paying it off sooner. We could have probably saved another $10,000 in interest easily especially when we still had our 30yr 6.24% monster. Hindsight is always 20/20 :)

[tightwaddy]

Monthly Check-in:
Aug 1, 2015: $101,100
April 1, 2016: $64,669
May 1, 2015: $59,586

[dandypandys]

$27, 116 to go!!!!! So Exciting.

Mortgage
Balance
$25,478.56

couldn't help myself- put 5k in from our savings so down to 20,478.56 now! Can't wait to be in the teens!

wooohooo just got paid, and a few extras- so just dumped a bunch in!
Now at $17678.00 Mortgage payment comes off in a few days too- should take us to 16k something yayayay

Down to 14k as of today

[couponvan]

$27, 116 to go!!!!! So Exciting.

Mortgage
Balance
$25,478.56

couldn't help myself- put 5k in from our savings so down to 20,478.56 now! Can't wait to be in the teens!

wooohooo just got paid, and a few extras- so just dumped a bunch in!
Now at $17678.00 Mortgage payment comes off in a few days too- should take us to 16k something yayayay

Down to 14k as of today

So close!! Awesome work.

[asauer]

Yay! 69,999!  I'm excited but have a question for other payoff club members.  Getting closer to my goal, I'm starting to feel like I'm waiting for the other shoe to drop- like something is going to reach out and snatch my success.  Anyone else get this niggles every once in a while?

[Mike2]

I want to join this club.  Current balance is $80,630.  A year ago it was around $90,000.

[couponvan]

Yay! 69,999!  I'm excited but have a question for other payoff club members.  Getting closer to my goal, I'm starting to feel like I'm waiting for the other shoe to drop- like something is going to reach out and snatch my success.  Anyone else get this niggles every once in a while?

Just that you second/triple/quadruple guess your decision. Most here though say they would never go back to a house payment again and that peace of mind is worth it.

[Cyaphas]

Has anyone every run the numbers of not paying Home Owner's insurance anymore vs the investing side? If you no longer have a note on the property you're not obligated to pay home owner's insurance. I'm deeply considering not paying Home Owner's Insurance when the note is paid off.

[Faraday]

Has anyone every run the numbers of not paying Home Owner's insurance anymore vs the investing side? If you no longer have a note on the property you're not obligated to pay home owner's insurance. I'm deeply considering not paying Home Owner's Insurance when the note is paid off.

This only works if you are already FI and can self-insure.  The late Charles J. Givens wrote a book titled "Financial Self-Defense" in which this was one of the types of recommendations he provided.  https://en.wikipedia.org/wiki/Charles_J._Givens

However, I grok your thinking on this: it feels almost wasteful to spend money on homeowner's insurance. I work with it by optimizing insurance costs and shopping around.

It seems to me that after mortgage payoff is when you would most need good homeowner's insurance. After all: you don't want to wake up one day and be snapped back to square one if your home is destroyed in a hurricane. (Full disclosure: I live in the southeast and hurricanes that make landfall here will spawn tornadoes that can destroy homes. It's a common enough event that I would never dream of going without insurance.)

[Lmoot]

I could see going without hazard if you know you can cover the cost of repairs or replacement and have somewhere else to stay. It's typically a finite amount so easy to determine. I would never go without liability though bc the moon is the limit and it's rare to find liability only. I suppose you can do an umbrella liability but I don't really know how that works or how much it is compared to hazard and standard liability.

[Heckler]

living in an attached townhouse with an older smoker two doors down, there's no way in hell I would go without home insurance.

[BlueHouse]

living in an attached townhouse with an older smoker two doors down, there's no way in hell I would go without home insurance.

I was going to say something very similar.  On my block, there have been two fires in the past 2 years.  The first one was from another neighbor flicking a cigarette into a trash bin that was touching my friend's house.  The entire back wall of their house caught on fire (all the siding).   They didn't even know the house was on fire until the Fire Department knocked on their front door and asked them to evacuate the house.  Luckily, a contractor was working outside and saw the flames and immediately dialled 911. 
The second was a neighbor a few doors down from me.  Their car engine burst into flames at 2:30am and their entire garage was on fire but was snuffed with sprinklers before it did any other damage.  The garages on our rowhomes constitute the first floor of our homes...so they were asleep directly above.  I admit, I have the least possible Home Insurance and it wouldn't be enough to rebuild, but it would be enough for me to start over somewhere else after selling the plot of land.

[rjbf65]

I'll join.

Started June 2014 at 71k.

It's currently $55k.  Goal is to finish it off by next June.   Have 20k in cash that would finish it off by then.  We are currently investing 15% as well.   Basically doing the Dave Ramsey plan.

Currently down to $51,500.  Hoping to get under $50K a month from today.

Down to $49660.  Was able to throw an extra $1555 at it this time.  Budgeting to be able to throw an extra $2500 next month.

$46,950 -- a $2,710 reduction this month.  October should be a little better with the magic of the 3 paychecks for me this month.  Should be under $40K by end of the year.

$41,843 -- a $5,107 reduction this month.  The 3rd paycheck was big this time.  Would love to be able to do that every month!  My goal for end of November is to get under 40K.  Once I'm at the $40K mark, I'll have about equal amounts of cash in the bank and mortgage balance.  Still also maxing out 2 Roth IRA's which speaks for $917 per month.  It is always tempting to stop the Roth or to throw a bunch of the available cash at it.  I think I'll just stay the course of throwing all the extra cash that was left over after the month at it.  Once the mortgage is gone, all towards investing.

$38,922 -- $2,921 reduction this month.  More travel and eating out this month, as well as property taxes and insurance slowed us down a bit.  But we are at the goal of being under $40K balance!  It's going down at a pretty good pace that I'm happy with!  We will have some Christmas expenses coming up this month but it shouldn't be all that bad.  My target is to hope to be under $37K at the end of December.

$35,898 -- $3,024 reduction this month.  Received a small bonus from work to more or less cancel out Christmas spending.  Also had to replace the wife's windshield.  Would love to be down to under $33K after January is up.  Have quite a few things on the horizon.  We are expecting our first child in late May.  With that we are planning on upgrading the vehicle fleet some.  While going from 3 vehicles to 2.  Just looking for more room and reliability.  Need to have the ability of hauling a child, 2 dogs, and luggage for trips to see our parents.  We have been on the mustachian side of things when it comes to vehicles.  Our 3 vehicles combined might be worth about 9 or 10K.  My goal is to have a paid for house as well as having atleast 1 newer vehicle also paid for by the time the baby arrives.  We are now at the position of having more cash than mortgage balance.  Really looking forward to knocking it out asap!  Another thing about having it paid off by the end of May is I'll finally be eligible to contribute to my 401K starting in July.  Would be wonderful to max out a 401K in just the remaining half of the year!

$32,026 -- a $3,872 reduction this month.  I always have to wait until the 5th or 6th of each month to process my extra payment.  I'm one of those weird ones that pay things as soon as I get the notice instead of holding on to the money for as long as possible.  If all goes well February and March have the potential to be good debt reduction months.  Tax refund in February hopefully and a 3 paycheck month in March.  We will be doing some vehicle upgrading with a new baby on the way but I will do everything I can to keep that cost to a minimum.

$31,609 --  a $417 reduction... I only made the normal payment this month and putting the agressive paydown on hold.  Some big possible life changes on the horizon and I want to have as much cash in the bank as possible just in case.  After the dust settles is when I'll finish it off.

$31,190 -- $419 reduction .. Another minimum payment.  Will be spending about $15K out of pocket upgrading the worn down vehicle fleet and adding room for the new baby next month.  Hope to finish off the mortgage by the end of 2016 or before.  Looking forward to getting the baby home and healthy and pressing reset on the paydown plan that we were doing so well at before.

$30,770 -- $420 reduction.  Spent about $22K to upgrade vehicles. Facepunch worthy I guess.  Now we are just waiting for the arrival of the baby!  I also switched from maxing out 2 Roth's to doing 15% in my 401K since I just became eligible.  This will give us a couple hundred more per month to throw at the mortgage.  Hopefully its paid off at the end of the year.  If not, it may be by my 33rd birthday in March. 

[Dicey]

Has anyone every run the numbers of not paying Home Owner's insurance anymore vs the investing side? If you no longer have a note on the property you're not obligated to pay home owner's insurance. I'm deeply considering not paying Home Owner's Insurance when the note is paid off.

If you ever plan on purchasing rental property with a mortgage, the lender's going to ask for Proof of Insurance (POI) on your primary home, paid off or not. Just another wrinkle to consider...

[FIREby35]

I've got to share this and, as others have said, sharing with family and friends seems to come with baggage. So here it is, we own our little slice of heaven - free and clear. We are now 100% debt free.

Myself and my wife are both 31. We have three kids (4, 3, 1). We bought our home for $172,000  26 months ago. We live in the midwest, so that bought us a 100 year old, three bed, 1.5 bath, 2000 sf Craftsman style home, 1.5 miles from the city center and my office. We also invested approx 20k into the home with a new roof, refinishing wood floors, fixing old wooden windows and their weight pully systems, making a brick patio, putting in a white picket fence, raised flower beds, taking out a wall to connect kitchen/dining room in a more modern open feel, creating built in shelves for our "library," and more. A lot of those renovations involved us doing it ourselves or calling in favors to pay only the materials. I love tinkering around and fixing things, so that is fun.

Anyway, we own it (for real).

For all you who think we should have invested. That's cool. We are aware of the arguments on both sides. Rate was 4.375%. We paid the $172k while also maxing two 401ks and putting a little extra aside. Total NW counting the house as 200k is $450,000. So, we still have a significant position in the market that will only increase now.

Two funny stories. First, I did tell my dad because he is pretty solid with money even if he has never fully become mustachian (didn't start buying used cars until he was 50 (He's 56 now) and I've had to tell him about management fees repeatedly). Still, he isn't going to starve and is a solid guy. He was funny because he didn't say anything for a minute or two. I just let the silence hang. Then I said,"What are you thinking." He replied, "I shouldn't have spent my whole life working for the man." He always kept the corporate job and I started my own business. I did tell him he was the inspiration for starting my business since he has talked about starting his own business (but never actually did). Anyway, he's a great guy and his reaction was interesting.

Second, the bank had NO IDEA HOW TO PROCESS A PAYOFF STATEMENT. Really can't say more than that. It was really clear mortgage payoffs are not a common issue they deal with.

[Monocle Money Mouth]

I've got to share this and, as others have said, sharing with family and friends seems to come with baggage. So here it is, we own our little slice of heaven - free and clear. We are now 100% debt free.

Myself and my wife are both 31. We have three kids (4, 3, 1). We bought our home for $172,000  26 months ago. We live in the midwest, so that bought us a 100 year old, three bed, 1.5 bath, 2000 sf Craftsman style home, 1.5 miles from the city center and my office. We also invested approx 20k into the home with a new roof, refinishing wood floors, fixing old wooden windows and their weight pully systems, making a brick patio, putting in a white picket fence, raised flower beds, taking out a wall to connect kitchen/dining room in a more modern open feel, creating built in shelves for our "library," and more. A lot of those renovations involved us doing it ourselves or calling in favors to pay only the materials. I love tinkering around and fixing things, so that is fun.

Anyway, we own it (for real).

For all you who think we should have invested. That's cool. We are aware of the arguments on both sides. Rate was 4.375%. We paid the $172k while also maxing two 401ks and putting a little extra aside. Total NW counting the house as 200k is $450,000. So, we still have a significant position in the market that will only increase now.

Two funny stories. First, I did tell my dad because he is pretty solid with money even if he has never fully become mustachian (didn't start buying used cars until he was 50 (He's 56 now) and I've had to tell him about management fees repeatedly). Still, he isn't going to starve and is a solid guy. He was funny because he didn't say anything for a minute or two. I just let the silence hang. Then I said,"What are you thinking." He replied, "I shouldn't have spent my whole life working for the man." He always kept the corporate job and I started my own business. I did tell him he was the inspiration for starting my business since he has talked about starting his own business (but never actually did). Anyway, he's a great guy and his reaction was interesting.

Second, the bank had NO IDEA HOW TO PROCESS A PAYOFF STATEMENT. Really can't say more than that. It was really clear mortgage payoffs are not a common issue they deal with.

Great job FIREby35! That's an impressive payoff timeline :) Since you own your own business, having the house paid for is probably one less thing to worry about. It's not always about maximizing investment returns.

[K-ice]

I've got to share this and, as others have said, sharing with family and friends seems to come with baggage. So here it is, we own our little slice of heaven - free and clear. We are now 100% debt free.

.... fixing old wooden windows and their weight pully systems, ...

Nice Work.  Do you have any tips, links, on how you fixed the windows?

[FIREby35]

This was the classic Mustachian project because there was nobody who would fix them. Everyone wants to sell you new vinyl windows and it was super expensive. Not to mention I didn't want to put new, modern windows in my old house. Plus, with storm windows there is basically no cost/energy savings. Now they all work. It's pretty cool because the house was built pre-ac and so the windows are placed in ways that create a gentle breeze inside the house if there is any outside air movement. Pretty genius for the guys who built it in 1917. I am still working on re-painting, staining, glazing and beautifying each of the actual window sashes. I am about 35% done with that. All you need for that is a sander, paint supplies and a putty knife.

This old house has a video on this and pretty much every old home issue.

http://www.thisoldhouse.com/toh/video/0,,1631564,00.html

[FireLane]

I definitely want in on this thread!

I bought my place in January 2009 for $265k and was paying the mortgage ahead for several years even before I discovered Mr. Money Mustache. In 2013 I refinanced at a very good interest rate, but kept my monthly payments the same so the payoff rate would accelerate.

As of today, I'm down to $60k left. I could pay it off this year if I got really aggressive, but I'm trying to divide my paychecks between that and putting money into Vanguard. Aiming to be mortgage-free by 2018!

[SAfAmBrit]

Principal paid off so far

2012 - $3415
2013 - $3994
2014 - $8483
2015 - $38412 (yup got rid of all the debt and $10 000 windfall not expected)
2016 - $30706  so far

3/1 Remaining balance $87322. Projected pay off date 09/09/2017 - SO 51st birthday.

4/1 Remaining balance $81837

4/30 Remaining balance $76952 (I owed the tax man!)

5/29 Remaining balance $73836

Feels like a super bad month but onwards we go. The principle has gone to $500 per month which was a goal - so the next goal being set is being in the 50's. (of course the ultimate goal is Mortgage Free, but I like mini goals on the way.) Congrats to everyone who paid their homes off!

[Dicey]

What about instead of putting $15K a year towards the mortgage directly, we put it into a index fund/mutual account and at the end of the 7 years, decide what we want to do with the money from there. We will still be paying $800 a month towards the mortgage on a monthly basis (which gets the mortgage paid off by the time we are 48) but it seems like putting the $15K each year in an investment account allows us more flexibility. If in 7 years, we want to take all of the money and pay off the mortgage we can, or we can put it towards something else. Thoughts? I also posted more details on my blog but it doesn't get much traffic yet and I would like direct responses.

I missed this earlier. Yes, yes, a thousand times YES! Paying off the mortgage before maxing out other retirement/investment options is penny wise and pound foolish.

Stuff the savings vehicles full while inflation does its thing and your fixed rate mortgage will become relatively cheaper while your net worth ratchets. It's a more advanced concept than "Kill all the debt", but it's a smarter approach in the end. Soon enough, the paid-off mortgage feels "meh", primarily due to taxes, utilities and upkeep always increasing. Watching your investment account balances grow never gets old.