I think most of us would agree that money gives us security. I wish I had made enough money to fully fund all those first. I thought I was doing well with house hacking but you took it to another level!!! I could invest that money in Treasury Bills, Mutual Funds, or other investment vehicle. I don’t think anyone who pays off their mortgage will regret it. With enough money, you don’t have to fret about the little things, and you can freely make spending decisions. But that would mean my wife and I would have to be ultra frugal and make only small contributions to our investment accounts; it would be like living our residency and law school days all over again in which we felt like we were barely scrapping by. Adjustable-rate mortgages typically provide a lower interest rate initially, but over time, the interest rate may adjust upward. Paying off low interest rate debt is an emotional decision that for many is worth 100s of thousands of dollars. It’s guaranteed returns. That’s awesome to hear and I definitely wish I had a bit more a debt tolerance. I know for some people they can handle it very well while others like myself have a bit more difficulty dealing with it. I think paying off a mortgage is great, especially for early retirees as it is a form of deleveraging. If you pay it off in 6 years (average of 5 – 7 years) that’s $12,000 per month with a total interest payment of $87,229. This is a possible alternative for those who must pay it down ASAP but some calamity happens making continued payments difficult for a short time frame. Before cutting a check for a mortgage loan balance, be sure to evaluate these factors to ensure you’re making the right decision for your circumstances. We will pay off our mortgage this year. After all, I had graduated with a finance degree in college. TX I’m going to make the same decision as you. While I may not have come out ahead when you solely compare paying my mortgage off versus investing the stock market, I believe I came out ahead when you factor in my salary increase and bonuses that I received. A very inspirational story…especially for someone who is working their way through student loan debt and then mortgage! In my case things worked out. It was tough at first but became easier and easier as time went on. Designed with convenience and timeliness in mind, 70% of surveys are answered on a mobile device in just a few minutes. I’m sure this is a huge burden taken off your shoulders! Start receiving paid survey opportunities in your area of expertise to your email inbox by joining the Curizon community of Physicians and Healthcare Professionals. Some days I wonder how much further ahead I’d really be. My job is 100% commissions and my husband’s job is so stressful we fear a heart attack or stroke is inevitable. Here are give ways to cut your monthly payments and pay … I paid off our house in 2010, and while it would have been mathematically more advantageous to pad the nest egg with the house overpayments, math does not keep me up at night, but debt does/did. I discuss my experience using a doctor mortgage in this post. Great blog! There is NO RED PILL! With good but highly unstable income and health reasons to consider, it was never a question of lost opportunity costs. That seems reasonable. Sometimes peace of mind trumps dollars and cents . Though I guess, it depends on each person’s risk tolerance. One the one hand, there is a huge psychological benefit of having no mortgage debt. It just mentally frames house as a business debt rather than a personal debt. At some point we will have the wealth to afford the luxury of being debt free. Hahaha…I’m in the same boat. Paid off our mortgage in 2014 and have no regrets! Fun post! Find the latest medical articles and paid surveys. I have always hated debt, so I wanted the shortest loan possible that I could afford. Don't subscribe Most of the proponents for paying off a mortgage balance early consider the interest rate first. Earn easy 1099 income with quick surveys for healthcare professionals with InCrowd. If you get sometime please give it a read. In the end, if you save the or invest the money you would have been using to shorten the mortgage you will come out about the same, but if disaster strikes it is better to have 100k in savings and a 300k mortgage than zero in savings and a 200k mortgage. So my household income is about $80,000 a year and just using $10,000 from that. STORYTIME: How We Paid Off Our Mortgage in 5 Years ~ How To Pay Early + Fast! I am trying to aggressively pay down principal on our mortgage. Within five years, we had the house completely paid off. But this strategy allowed me to come & go at will & be there to collect rents each week & there was always beer in the fridge. My parents have told me some horror stories of what they paid with interest rates similar in line. That peace of mind is priceless!!! But I guess, those were the days in the early 2000s. Over the life of a $300,000 loan, a homeowner would pay slightly more than $215,000 in interest payments, plus the original borrowed amount. Did you feel like that aspect helped or do you think you would have been diligent enough to have saved the extra each month and invest it? Agree completely. I have an amount equal to my mortgage payoff in a high savings savings earning 1.60%. But I have found that you don’t notice a gradual change and have applied that. I love hearing views that opposite side of the coin I wish I had the risk tolerance for debt. The asset allocation in question from The Physician Philosopher was > 100% stock, making it riskier than a 100% stock portfolio. To go more negative with a negative bond would be to sell more bonds (take out bigger mortgage). We focused on paying off that mortgage. Contact Jim Webster (NMLS #658933) at 240-620-1414 or jwebster@fultonmortgagecompany.com, CO, IL, IN, KY, MI, MN, OH, PA, WI, WV Sounds like a great plan Zac!!! Contact: Manish Patel (NMLS# 1989070) at 617-947-9259 or manish.patel@fairwaymc.com, MN, WI I probably ended up saving money, even with the cost of the cleaning service, by avoiding household damage due to neglect. You are absolutely right. Given your numbers and to pay off your loan in 13.5 years (average of 12 – 15 years), you monthly payment are about $6025. Thank you for supporting those who support this site and our charitable mission. I guess the follow up question is, “Does that even matter, or is it only semantics?”, I’ll defer to PoF but since I know what the rate of return was for my mortgage calculated with the interest rate I would think it was positive based on the final rate of return. Too many of my friends carried student loan debt. One of my friend got roommates for quite a few years too. Once it’s paid off I’ll put more into my taxable accounts and/or start making backdoor Roth contributions (which will be easy for my wife but difficult for me due to other IRA accounts). Neither of us won the Plutus Award, but the nomination alone was an honor. I paid off my mortgage at age 31. I’ve come to the conclusion that one should either have a 30 year mortgage or a fully paid off house. Now if one is so emotion driven that they need to be debt free to stay the course and to be happier then paying off a low interest rate mortgage is an appropriate decision. We are the exact opposite and have held unto debt while investing. I think paying off a mortgage is great, especially for early retirees as it is a form of deleveraging. But haven’t pursued it. In our personal financial world, this was a no brainer we intend to celebrate thoroughly by Christmas!! For many homeowners, finding the right balance between expediting the payoff of a mortgage balance and covering life’s other expenses is key. Great post Rob – Even though we just chatted about this on our podcast episode, I’m still inspired how you are free to do what you want with your time and money now. Our first mortgage rate was about 10%. Very true Joe!!! We will probably plan on the 12-15 year relative frugality plan since both of us don’t ourselves retiring in the next 5 years . However, struggling to come up with the funds to pay off a mortgage balance can be more stressful than it is worth, especially when trying to find the dollars for retirement accounts or reducing high-interest rate debts. Unfortunately I had to make a decision, which meant for me paying off the mortgage first. Being mortgage free gave us a big psychological boost. It made all the difference in the world for me . My home has unfortunately has been stuck in a rut for the past couple of years since it’s a townhouse . I just saw a post on bogleheads about a Sharonview CD that is paying 4% on a max of $250k. Sounds like real estate has treated you well over the years . It lowers the need for taxable income and can not only lower taxes, but can increase subsidies for things like health insurance. If you enjoyed this post, be sure to check out more great articles from the author at Mustard Seed Money. In one sense, I would essentially gain built-in friends to hang out with. Now I am free to go part time which I will next year. Contact Sandi Jameson-Frith (NMLS#564023) at 586-749-8355 or sandi.frith@huntington.com, MI, FL Debt free from that time, no regrets. Cannot you recast the mortgage to lower the payment if you have been paying off aggressively? We refinanced to a 15 year loan a couple years ago and the benefits are really starting to show. We are just skipping our after tax savings for now though we already have a decent 150kish in there earning some dividends…. Its annoyingly bald face hypocrisy to tell someone “ignore all emotions, dont sell at the bottom, but think of the feeling you get by paying off your mortgage”! Has given me some things to think about. Interesting story! Sounds like you have a plan in place and are executing it perfectly That’s awesome to hear. If its that risky just sell, never buy in the first place. Over the last few years having enough cash in investment accounts has allowed me to take on more risk at work which has payed of handsomely and allowed even more taxable account contributions. *See sponsor sites for conditions, terms, rates, fees. Keep in mind, this was the early 2000s. That’s huge. Is paying off the mortgage early a mistake? Do you think that you would have invested the difference had you chosen the 30 yr mortgage? There are obvious pros to paying off mortgage loans early. I was paying down my mortgage during the recession and it felt like it was the only thing with a positive return . I’m with PoF on the 15 year loan. I was definitely glad to diversify when I did . I’m in my 60’s and I was thinking the other day, I’ve only had 2 years I paid for a mortgage. A mortgage is meant to offer affordability for homeowners, so the payoff debate requires more than a quick calculation of total interest paid. If I had been itchy to potentially move I know that it probably would have been the wrong move and really bitten me in the behind . I live in a high cost of living area and I think my home increased in value 6x since I bought in 2003. That is already higher than any of my debt. Though my brain says don’t do it. Before I was in the same place because I felt safe. The individuals listed below offer physician mortgage loans for these lenders and are paid advertisers on the blog. For us, between 4 to 6 years to paying off the mortgage AND saving enough for life after no 9-5 job. That is my GOAL.Eg While daunting and strenuous to pay off the mortgage, by the end of 2012, I was able to breathe a sigh of relief. Interesting post. Having the debt set up as business debt is I’m sure much easier to swallow Too bad AirBnb wasn’t around when I was paying off the mortgage…although I’m not sure there would have been much room in the inn , While we still have nine years left on our mortgage, I am so glad we got a 15-year mortgage. But I have no problem with the 15-year mortgage. I am hoping if I ever move into a new home in the future that we can pay cash for it. The arbitrage paid for a new retirement car one for me, and one for my wife which I stagger purchased about 3 years apart, so it was definitely worth doing. The benefit is only apparent when the mortgage payment disappears. (Lenders- if you would like your name and contact info listed here, contact us for a quote. Thanks for the read!!! On the other hand, I would become an instant landlord with additional burdens and responsibilities. Here are some things to consider before deciding. With a rate of 2.5 %, 10 years left (15 year mortgage) and FI the ability to be debt free is appealing. It is truly a financial windfall to not have a mortgage payment, and it facilitates and increased savings rate (plus enjoying yourself a little more). Most individuals gearing up for retirement are planning to live on a lower fixed income compared to their years in the workforce, which can put a strain on monthly cash flow. Now I take risks. That said we do max out on our 401k first and I would not pay that off unless I had that covered. 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