I am terrible at setting goals. I also don’t really share numbers here. At least not in any streamlined way. If you read my posts about unexpected expenses and the $24k in debt we killed last year, you’ll get a fairly decent picture of my income and my spending. But let’s leave a little mystery to life, shall we?
The one thing that I do consistently well, though, is to track my mortgage in an attempt to slash away at it. The goal is to have it paid off before my 40th birthday. Ten years seems reasonable. Rather than continuing to talk vaguely about it, I thought I’d share quarterly updates here.
The Original
When we bought our house, our mortgage was for $214,000. We put down just over 20%; in doing so, we dodged PMI. I’m not even sure I knew how PMI really worked back then. All I knew is that I didn’t want to give the bank any extra money on top of the gobs of money I was already going to be giving them in interest over the next thirty years. While I know some of you gasped at the thought of a 30-year loan, I made sure that we could pay it off early without any issue. See? Little Penny did have her act together a wee bit.
Today
Earlier this year, we started to get aggressive with our mortgage paydown. In our typical budget, we plan for a double payment. Then, I toss my extra side hustle money for the previous month at the mortgage. That means that at the start of the fourth quarter of 2016, we still owe $180,815.12. Be still my heart.
As if that number isn’t panic-inducing enough, I should also point out that last year, I paid $7,076.95 in interest. Before you tell me that I can write this off on my taxes, let me remind you that I know. I did, and I’ll do it again next year. Now, let’s consider the fact that one of my friends rents a two bedroom, two bathroom apartment* with access to two pools and a pond for less than what we paid in interest. It goes both ways. You like your mortgage? Fine. Don’t let me stand in your way. But I’m getting rid of mine.
*There are also dogs. And faint odors. And neighbors very close by. Sometimes, I really do like my mortgage.
The Plan
In short, the plan is to stay the course. There will be months when we pay 3.5 times our required payment. I’ll continue to celebrate obnoxiously on Twitter. There will also be months where we only pay double or slightly more than that. While I hope it never happens, there may even come a time when we only pay the regular payment. Maybe there will be some unexpected expense. Or maybe I’ll get my investing prowess so on point that I put all of my extra income there instead. I’m hoping that quarterly updates will be enough motivation to keep us pushing forward aggressively. Let’s get this done by 40, shall we?
So Tell Me…Should I share more numbers? Do you have a mortgage? What’s your debt-slashing plan?
I like looking at real numbers on personal finance sites, so my vote is yes. More real numbers. I wish I felt the same way about my mortgage, but I don’t know that I love my house enough to pay off the mortgage. My thinking is that I’ll pay down the mortgage and build equity and either turn it into a rental or sell it when I retire. I could downsize, although it’s pretty small:) I’m reading “How to Retire Early” by the Charltons, and they included their house in their net worth when saving for financial independence. When I originally bought the house, I thought I would want to eradicate the mortgage ASAP, but I’ve since shifted my attention to savings and investments. I mean, the Charltons paid off their mortgage, I believe, or almost paid it off. But, I’m so far behind in retirement savings that I think the mortgage is my last priority. STILL, real numbers are helpful. I always appreciate them.
Thanks for the perspective, Amanda! I think I’d like to die in our house…and not just because we basically took it down to the underlayment. If I never had to take up tile again as long as I live, it will be too soon! 😉 If I had a better investment plan (pay pension, max out Roth, put extra in taxable, be confused about life), maybe I would go that route instead.
We’re working on killing the mortgages on our two rental properties at the moment. They *should* both be paid off by June 2017 or somewhere around there. After that, we’ll focus more energy on our own mortgage. Death to them all!
Hear, hear! Death to all the mortgages. I cannot imagine having more than one. But major props for doing the rental income thing so well!
I like numbers, but that’s totally up to you.
Hubs and I are in the midst of house hunting and killing the mortgage comes up often. He wants it gone and I’m playing the long game. I hope to end up somewhere in the middle. Pay bi-weekly so I feel like I’m making some effort as we continue to invest and then ramp it up to have it gone in 10 ish years. But who knows… we don’t even have the debt yet!
Kate, you’re right. It’s hard to know how to the debt will feel until you have it. I think the wild card is also the other money that might have to be put into the house. We did a lot of work on the house the first few years we owned it, so we couldn’t be as aggressive. We also had two car loans. So, yeah. There’s that, too! Can’t wait to hear about your journey.
Definitely have a mortgage and a part of me dies when I see the “amount applied to principle” every month- but for now we are focusing on my SL debt while building investment accounts.
I did fill out a re-fi application over the weekend – I think we can knock almost a percent off if everything works out
10 years is a great goal – think of all the interest savings!!!
Our loan is 3.5%. We could try to refinance, but I’m not sure the costs would be worth it since our interest rate is low. It’s on the to-do list to look at eventually. I’m also a bit leery because I like the flexibility of knowing we could funnel money elsewhere if there’s a need. Or I learn how to really invest.
Like Holly, I’d much rather pay off the rental mortgage then the home right now. (We paid off one early this year.) For one thing, it’s lower and is easier to attack. (both have the same interest rates.)
I think the real numbers are inspiring, but I also know that we don’t like to share our numbers due to privacy concerns. How much you share should totally be up to what you feel comfortable with.
Thanks, Emily! And if I had a rental property, I’d be right there with you. Not that brave…and don’t have the extra money to swing it. But mostly not that brave 😉
My husband and I are having the debate of how to continue paying down the mortgage as it will soon be “our mortgage”. I’m not sure where we will land. It’s currently on track to be paid off just after my 40th birthday with no extra payments. It’s an ARM though and the rate will reset in early 2018, so if we don’t plan to pay it off in 2018, we will refinance into a 10 or 15 year fixed mortgage. It’s sadly small enough now though that the fees for refinancing are kind of high and we can’t get that great of an interest rate for a reasonable break even period anymore. I’ve gotten mine down from $286,000 in 2012 down to $127,000 now 🙂
So I’m a little letdown that you didn’t work in your housing percentage in here. I felt like taking up a billboard for you or hiring a skywriter. I guess I’ll just have to wait for your blog post, huh? I can’t wait to hear how things shake out for the newlyweds. Congrats again, Leigh!
Oh right!! It went from 24% of gross when I bought down to 3% now lol. That is on my long list of married finances blog posts! So much to blog about. 😀
Congrats–you’re doing great!
I know people who take equity out of their homes to invest, but there’s such peace that comes from having a paid-for home. Maybe they’ll come out ahead mathematically, but they also get more heartburn when the market drops.
OMG, no. That makes me want to breathe into a paper bag just thinking about it. I know I’m probably losing money for old-age Penny, but 30-going-on-90 Penny’s heart might stop if I were to do something like that! Peace of mind now has to count for something, I’d say. I guess that’s what makes this all so personal!
We spent more than your interest for a 2 bedroom, sort of 2 bathroom apartment without a pool or access to a pond (there was a pond, but it was just a natural thing that I never figured out how to get to it). But we did have a parking spot (which was an improvement over our old apartment, which was 1 bedroom, 1 bathroom, and still would have cost more than your interest. Thank you PDX area rentals (and we were pretty far out from the PDX and it was still ridiculous).
I am glad to not have a mortgage, because the idea of debt in that amount stresses me out just pondering it. However, we are renting half of a duplex from a friend, and oh man is it nice to have a house and a yard and a driveway and to just not be in an apartment. We have a good situation here, but to have our own space would be even better. Luckily, our rent has went down (yay for friends who don’t feel the need to charge more just because they could), but it would be much better to be paying for our own space, interest and all, versus just paying a friend’s interest bill, ha!
TBH, I have another set of friends (they’re engaged) and they spend more on their rent than we do on our mortgage AND property taxes. But, I’m still going down swinging. I mean, bills stink no matter what…and we all have to live somewhere, right?! I love having our own space (oh, the gardening!), but it sounds like you’re got a great situation going on.
Oh man. I am WITH YOU. And recently, I’ve started feeling like I’m in real debt with the house. It stresses me out sometimes and I get all worried about it and I want to GET RID OF THE MORTGAGE. So, we’ll keep on keeping on and we’ll celebrate obnoxiously together!
That’s because you are in real debt with the house?! I know the rest of the PF world says it’s good debt or different debt. But it’s still a bill I have to pay every month…and it’s a behemoth! So, yeah. I’m right there with you, Maggie. I’ll find the confetti GIFs for our celebrations.
Numbers are fun, if you want to (spoken as a true money nerd). I would like to share more numbers but I find that at a certain level, people don’t really take all the complexities of our situation into consideration and it’s probably better that I don’t share our whole picture with numbers, in case someday I ever choose to unmask (highly unlikely but you never know).
Now that we’ve refinanced, I’m not stressing as much about it since our money is going a lot further, but I can’t decide if I want to hoard cash or pay down the mortgage much faster. I think PiC is in favor of the latter but he mostly goes in the direction I point once I’ve done the research so I need to be really mindful of what I decide!
That’s my husband, too! He’s too easily swayed when it comes to money decisions. “I don’t want to know what I think. I want to know what you think.” Repeat x 100. When it comes to the thermostat, though, that’s a sword he’s willing to die on.
There are a couple choices in life I am super pleased with, and paying cash for our house is one of them. I LOVE not having that bill. Our two rentals have small-ish loans on them. To that I have mixed feelings. I think for now we will keep stashing the extra cash in our IRA’s.
As to number sharing, we share our net worth and monthly expenses. But we also don’t have many friends who read, and zero family. I like writing it because it helps me focus on it a bit more. And you get positive feedback on the good things you are doing, which is the opposite from real life. Where people don’t really see the paying down debt, saving, retirement accounts, ect.
Part of me totally wants friends and family to read. But then it might get all awkward?! Actually, my biggest fear is that my students would find it. Obviously, I don’t say anything inappropriate. Actually, I’m usually highly complimentary of them. But I’m mostly afraid that they’d leave dab videos in the comment or some other kind of silliness.
I hope to find that feeling of not having a housing bill soon!
I have a mortgage. Yes, a mortgage in retirement. Not what I had planned, but that’s the way it went. While I’m not able to pay off 2-3 times the payment each month, I am putting extra payments towards principal every month and hoping to kill it as soon as possible. I had thought about refinancing, but with an already low interest rate, I’m not convinced it’s worth it.
As for sharing numbers, I think people really like to see what other people’s actual numbers are, but I can understand how you feel. Just a few days ago, I shared our yearly expenses by category so I’m dipping my toes in the water to see how it feels. I say share what you feel comfortable with.
I love how honest you are about everything, Gary. Not only do you roll with things, but you problem solve them. I find that more inspiring rather than everything being textbook perfect. What’s perfect anyway?! 🙂
We have talked a lot about paying down the mortgage that we still have. Been In the home 17yrs and have built up sizeable equity. But we expect to sell in 2 yrs time and relocate to our mountain home, where we carry no mortgage. We elected not to pay the primary mortgage off but to take the tax benefit and dollar cost average into our Vanguard account, letting market winds take our money to hopefully new heights.
As we entered the blogosphere, we made the decision not to talk numbers. We have shared some general numbers on SWR, future expenses without the “cost of working” etc. We are just not comfortable sharing numbers but that is our choice and everyone needs to make their own decisions. For what it is worth, whether I read a blog or not, has nothing whatsoever to do with numbers being shared or not. I do realize some enjoy gawking at numbers but it’s not for me.
Thanks for the all the insight, Mr. PIE. Right now, I think this is as personal as I will get. But I plan to share more of that in my upcoming post about paying for grad classes (again) and our poor, poor net worth. As for your mortgage, makes sense to me!
Wow, I couldn’t help but go over to your other post about paying off 24k worth of debt. A 0% interest plus a 0.9% interest.. Now I’m regretting paying off my car with all cash because I didn’t even ask about the financing option. I assumed it would be at least 1% interest so I didn’t even bother but assuming can breed bad results!
Ha! I wanted to kill my husband (then-boyfriend) when he took out a loan for .9%. I would have paid cash before I did that. Funny how 1% makes such a big difference in my mind, huh? Yeah, I’ve pretty much made mini-loans to myself since college on 0% cards (grad school, wedding, honeymoon) and then the 0% car loan!
We bought a townhouse in June 2014 with a 247$k mortgage and as much as it pains me, we are paying the regular ole amount and I can’t bring myself to open our online mortgage account (mostly because I don’t want to stress about it). We (I) put down 20% but a couple months before my man friend financed a brand new car. Which may have been silly, but we ran the numbers and it worked.
Cue 4 months after when I start reading about PF and then 4 months after that that i finally felt like we could discuss it and I convinced him to pull all his money from any house payments and towards his car which is close to being paid off and then we will be able to stock up cash to have another down payment when we have to refinance in 2019 (yay Canada). I’m not a variable rate person I couldn’t deal with that (at the start, depending on how it looks we may switch) but once that car is paid off we will be more aggressive about it. Especially since I see house prices crashing around us and I want to maximize as much as we can while we are very well employed still.
It doesn’t keep me up at night at all!
More real numbers!! Enjoyed this post!
We are definitely aggressive mortgage payers. We lucked in early because our first house made us a lot of money due to the market we were in when we moved for my husband’s job. Our second house the same. Now we are prepping to move from our third house to what possibly might be our last home back on the east coast where our family all lives.
This house, unlike the others, isn’t making us any money. In fact we may lose a bit on it because of work we put into it to customize it to our needs vs. the market in this area.
But because of how well we did before and how aggressive we are on paying down our mortgage, and that the new house will be in a considerably lower prices market, we are determined to be mortgage free or as close to it as we can be.
We had an investor try to convince us to refinance and give him money from our mortgage to invest for us and my husband and I literally laughed and walked out of his office. Our current advisor is awesome. She laughed when she met us because she asked how much we had invested and we both estimated some amount (close) but when she asked us how much we owed (the mortgage is our only debt) we both knew it down to the penny. So she helped us increase our investing while ALSO maintaining getting that mortgage lower and lower.
I don’t blame you at all for wanting to slash the mortgage debt asap! For many, it brings a peace of mind that cannot be matched.
I admit, I’m completely wishy washy when it comes to our mortgage. One minute I want it gone, the next we refi with a rate of 3.25%, realize our property value is growing exponentially, and I change my mind. Paying it off will slow other financial goals we have. Plus, when our kids are done with school (5 years), we can sell it and downsize or buy a house to rehab with the cash from the sale. So I guess I’m just not feeling motivated right now…
I like numbers, but I’m not hardcore! LIke, the level of detail in this post was bang on for me 🙂
My mortgage is just under $440k at the mo, and I still owe my folks about $90k as well as they helped me out.
Currently switching between loving and hating my mortgage (topic of my last post!)
I love that double is your base-line! I love seeing your tweets celebrating and don’t find them obnoxious. I want everyone to do well!
And that is why you are my favorite. Your ability to uplift everyone is just inspiring. I hope to get at your level one day!
We are currently trying to get our consumer loans gone. Once they are clear I want to throw everything we can at our mortgage. I did want to move to a slightly bigger place but I don’t want to increase the mortgage so we may decide to save so we can move to a slightly bigger house but cover the move in cash so our motgage doesn’t increase. Then continue to pay down the mortgage we do have.
That sounds like a solid strategy, Nicola. I cringe at the thought of ever having a mortgage again, let alone a bigger one!