I hate my mortgage.
How’s that for today’s installment of Truths That Surprise No One?
No amount of rationalizations have ever made my mortgage seem palatable. I know our interest rate is low. I know we bought at a great time. I know that my money could be working harder for me in the market.
But I also know that homeownership with a mortgage is like being a renter who is still responsible for, well, everything.
So I’m determined to pay off our mortgage early. I hate to set too precise a number because I don’t want to set us up for disappointment. But the loose goal is to be mortgage-free by the time I’m 40.
And we’re getting close. That’s in no small part due to the sheer amount of hustle that we put in last year. We grew out income, we cut more expenses, and it let us do some really amazing things.
We both maxed out our Roths again last year, and we put over $33,000 toward our mortgage too.
It was a good year.
The Interest – $4,834.84
Previously, I would grin and bear it through all the lectures about how my mortgage is actually useful come tax time. Think of the interest you can write off. Now, thanks to the new tax laws, people have dialed that interest talk down.
But I still think a lot about it. And it mostly just makes me feel a little ill.
Thankfully, the interest we pay each year continues to drop.
This past year, $4834.84 went to interest. To interest. To interest. To the bank. I know I’m paying for the privilege of letting them lend me their money or whatever else is written on the Kool Aid packet my mortgage broker was serving.
But the lower our mortgage total gets, the less comfortable I am with paying any interest. I’m trying to do the mathematically-prudent thing by riding it out and investing alone the way, but finance is never just about numbers.
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Still, let’s celebrate while we can. We paid a lot of money toward our mortgage, but it’s less than it has been. That’s a win.
The Principal – $28,938.46
That is a really big number. It’s a really, really big number when you remember that my husband and I are both teachers.
We have good jobs. We are paid well. I will earn six figures before I retire, but I won’t cross that threshold anytime soon.
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It feels incredible to share that we paid almost $30,000 to the principal balance. And it is incredible.
However, it’s also important to remember that we are already on the hook for $12,000 a year. Of course, that’s principal and interest combined. But often times people ask me how we can afford to even put a thousand dollars a month towards debt (because your mortgage is a debt, people!). Honestly, we don’t have a choice.
Lessons Learned from Paying Down $33K in Debt
We paid down a bunch of debt this past year. In fact, it’s our biggest debt payoff year yet. We’ve also had some impressive years since I started blogging.
- Actually, We Paid Off $24K in Debt Last Year – 2015
- $27K in Debt Destroyed this Year – 2016
- How We Slayed $30K Worth of Debt in One Year – 2017
With all that money sliding out of our bank account, you can bet I learned a thing or two.
It just does. That’s the biggest lesson that anyone could ever learn. Period.
Ok, I’ll elaborate. Debt is difficult because it means that your money isn’t really yours. In a fantasyland, this is where I tell you that I am borrowing a page from The Rich Person’s Playbook, in which we take on reasonable debt in order to make money from our money.
But let’s get real.
Having an extra $1,000 a month is the real goal here. Might that mean investing? Sure. But it also might mean taking a vacation or paying cash for my son’s braces (he did not win the gene lottery when it comes to overbites, I fear). Being mortgage free feels like freedom, and that’s what we’re working toward. We want more choices in our lives, and having more money and fewer financial obligations is the perfect recipes for that.
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Both is Usually Better…Or Just as Good
I will never understand how or why people think they have to make a single financial choice. There’s no reason why you can’t put extra toward your mortgage and invest.
If it helps you to laser-focus in on something, great! But for us, doing both works out well mathematically and emotionally. Our game plan for this year looks almost the same as last year. We start the year putting more of our extra money into our Roths, but we still put some extra toward our mortgage. Then, once our Roths are maxed thanks to extra paycheck months (hooray for March!), stipends, tax returns, and other side hustles, we double down on our mortgage.
This might change somewhat as we explore the different 403(b) options that my husband now has, but embracing both extra debt payoffs and investing is what feels right financially for us.
Finals Thoughts on Our Mortgage Payoff Progress
My 40th birthday is less than 8 years away. The thought of turning 40 is pretty unbelievable. The thought of turning 40 and not having a mortgage is the perfect fuel to keep going on this financial journey.
That’s how I know it’s the right call for us.
It’s hard to stay strong in suburbia. The land of subway tile and shiplap. The place where kitchen remodels are only complete if it includes rearranging your entire first floor, load-bearing walls be damned.
We know the money choices we are making are unusual. It’s tempting to fall in line with Joneses sometimes. But the fact that we have so many of our friends and neighbors lapped when it comes to paying off our last debt makes the hard work worth it.
So Tell Me…Where are you on your debt paydown journey? How can I cheer you on?