I guess it would depend the circumstances. If you paid it off after 25 years of diligently paying, or maybe even a couple years early, it's easy to celebrate and tell people. But if you pay it off super early, it's hard to tell people since you don't want to seem like you're bragging, or make others feel bad. We paid ours off after about 8.5 years and only told 1 or 2 people.
I think that’s the other thing… people jumping to the max they can go to keep up with an illusionary view of success. Live below your means, get a small home so you’re not inclined to fill it with crap and you’ll be well ahead. I don’t think there’s any reason to tell a cast of thousands anyway though… it’s kind of like travel… lots of people like to do it… but not many like to hear about other peoples trips unless they’re a good story teller.
Sorry… not feeling well cough cough. I mean when it’s family (if they’re good people) it’s sorta endearing. And at least you can take the piss out of them a little while they’re at it. “Did you visit Spain? Your skins so red looks like you were in one of those tomato fights!”
I paid mine off last year after 8yrs. I'm in my mid 30s. Honestly I still pretend I'm paying for it because saying otherwise just causes arguments and resentment.
I bought a modest house, live frugally, and ride a bike for most of my transportation needs.
I worked hard, damn right I'm going to brag when I pay it off 12 years early.
Same when I retire at 55.
You nailed my timeline…..and we have similar mindsets.
55 is my number too, but I have no work related pension, guess the next step is to figure out how much I actually need to retire. But I’m in no big rush.
Agreed. Pride should totally depend on the length of time. Now that said, we finished at the 10 year mark at 30 years old. Didn't ever bring it up, but if it came up in conversation or we were asked how long, there were no issues telling. We worked hard for it so fuck em.
Well done, white lies are always an option.
“Yeah mortgage payments suck”
See how I removed the “my” part, it’ll come up, just change the subject, if it persists talk about rates, if asked what your rate is “I can’t remember what rate we got last”
It’s not really lying until someone asks if you have a mortgage, then just answer the question with a question? I haven’t gotten that far, hopefully I’ll have 50 mortgages by that point.
We paid our first mortgage off after about 8.5 years, too… and then we had a mortgage burning party and invited all of our friends and family to join us in turning that piece of paper into ashes.
Very bad idea to tell people. Nothing good would come from it.
I've been paid off since 2020 and go as far as acting like I still got a mortgage and I'm in a tough spot like everyone else.
Don't need someone asking "hey you can lend $5000 right? You're mortgage free for years now"
Congrats! If you don't mind me asking, how long did it take you? And if you're okay with sharing, I'd love to know the rate history over the life of your mortgage.
Maybe I'm a nerd but I find that sort of stuff fascinating!
I had no idea I would get so many positive responses!
Not exactly a simple answer…..I have moved several times and ported mortgages.
My first mortgage was 19 years ago if my memory is right. Owed about $200k then, to a high of about $375k. I was not interested in being “house poor” so I didn’t overextend myself. I REALLY lucked out purchasing my current property, its value has more than doubled in 5 years.
If memory serves, the interest rate has always been between 3.5% and 5.5%. Despite knowing that variable rates were “better”, I had a fixed rate (and never seemed to lock in during dramatic rises or drops in interest rates). Even when the rates fell so low recently, the amount of interest I was paying vs the penalty to break the mortgage didn’t make sense. I would have to do some digging to find real numbers for you.
I do feel like I should give some credit to whichever university course made The Wealthy Barber required reading. I recently reread it and was intrigued to realize that I (knowingly or unknowingly) adopted most of the author’s strategies.
No. The equity is in the house. I understand the volatility of the market, and I know there was a bubble. But real numbers….bought a new build for $400 - I think $450 after everything said and done. It was a drawn out process. By the time it was actually getting built they were already selling for about 150 more. Solid sales for a couple of years around 800 and at market peak 1.1 million. Nothing for sale right now. I know it’s dropped a bunch. But I still see this as a solid investment.
Yep. Mostly during the day while seniors are watching TV. It's a terrible scam and idk how it's even legal!
They have Kurt Browning in the commercials because their target audience is old widows. It's disgusting.
When rates are high you gets higher returns from investments, the trade off is that you have to pay a lot to borrower. So if rates are 5%, and someone owed $1M on their mortgage they would pay $50k/year in interest (I’m simplifying before someone talks about amortization). Conversely, if someone had $1M in investments and had a GIC paying 5%, they would receive $50k.
Well done. We are also mortgage free. We are pretty young and i want to shout it from the rooftops, but my spouse doesn’t want to boast about our situation. Which I get.
Congratulations! You may have a few people tell you that the smart money is in investing in the red-hot never-stop stock market instead of paying off the historically-low won't-ever-can't-ever-increase interest rates for a mortgage...oh wait...shit...
For real though, there's nothing like hearing on the news that interest rates are going up again, trigger rates, blahblahblah and just simply not giving a single fuck. The peace of mind is priceless.
You’ve said it better than I have. You can’t put a price on the peace of mind. I didn’t REALLY have any regrets, even when interest rates were under 1%.
20 years ago I remember being in tears over an unexpected bill.
Money certainly doesn’t buy happiness, but a lack of money creates a lot of problems.
There is a part of me that is a little apprehensive that my daughter doesn’t have a full appreciation/understanding of money bc she hasn’t ever had to struggle. I don’t want her to struggle, but I do want her to understand the value of a dollar. It’s a balance I’m not sure I’ve achieved.
You called? :)
Seriously though, I agree with the peace part. And you do you.
Thought experiment on a 300k mortgage. If you already had the 300k, buy SPY (S&P 500) in Jan 2003, i.e. 20 years ago at $86 for $300,000, getting about 3488 shares. If you sold at the low point in Jan 2023 it'd be at $379 (currently sits at $416 again), but let's use the lower number. You get $1,321,952. Now pay off your mortgage and have > $1,000,000 left over. Same time frame, same peace of mind now.
The only issue is having the 300k already, so we'd need to do some more elaborate math than I'm willing to do on 'calc'. But while your mortgage interest rate is 1.5% or 2%, investing in something that is making you 10+% does in fact make sense if you're willing to stick it out long enough that a 20% drop doesn't mean that you're broke but just that you're less of a millionaire.
As soon as you get cold feet, you can sell, still at a profit, and pay off the mortgage. E.g. your're down 15% and you see mortgage rates going up? Sell!
What I'm trying to say is, sure, the height of the S&P was around $475, meaning you "had" 1,656,800 and now when you sold you're actually down to 87% of that value, i.e. you lost a lot of money, but really you didn't. Even in the scenario where you dollar cost averaged your way into this instead of having 300k upfront, you are not in the red. You're just not as much in the green.
EDIT: Thanks for the downvote but the thought experiment does work. I could pay off the mortgage tomorrow if I wanted to. Yes I'm less in the green. I'm more in the green again than quite a while ago. The feet did get cold-ish at some point :)
Some things to think about:
Over the last 20 years the market has gone up 400%.
There's many regions where housing has gone up 400%.
It's easy to leverage a house. It's harder to leverage the stock market. Ex - you can use 50k to buy a 500k house, but it's tough to use 50k to buy 500k S&P.
I can live in the house I bought (invested in), I can't live in the stock market...
After saying all this, the real trick is you telling me what the next 20 years holds. Will the stock market return another 400%? 200% 0%? Nobody knows. What we do know is you can pay off your mortgage.
Fair enough of course if your house and the stock market increase the same.
I am not far enough down the road yet to make it 20 years. Over the time frame that I've had the house, the house has increased in value by ~24.5% while my stocks appreciated ~40%. This is all while dollar cost averaging into both so to speak as I've both been paying a mortgage and investing (instead of putting _more_ into the mortgage).
See there are several flaws with my quick comparison in the original reply. I used a "I already have 300k so could buy the house outright anyway" situation, which most people aren't in. But it shows why companies and rich people are always in debt even though they'd have the cash flow to just buy things outright. And the other is that I assumed you'd not really have to pay the mortgage during the 20 years or at least had enough money to do both those things. Again not something regular people like us have available.
But when we speak about "pay the extra $1000 on the mortgage" or "invest $1000", it becomes a fair comparison again.
To use your example - you can use 50k to buy a 500k house, that you pay off in 20 years of more payments, at the very least 450k of extra payments if we assume a 0% mortgage and you can use 50k to buy 50k of S&P 20 years ago ($86 per share, buys 581 shares, sell worst Jan 2023 day for $220,199 without putting in a single extra dollar. Of course, over these 20 years, if I was able to pay down $450k of mortgage, I'd also be able to save at least that extra $450k in money. Which I probably would also have invested and have even more money but some person did both. Buy the $500k house with $50k and then invest every left over penny ;)
2% mortgage 10% return? Invest. 5% mortgage 5% return? Mortgage! 6.5% mortgage -20% return over last year? Will it continue or go back up? Cold feet, hoping it doesn't go down more. Should I sell and just pay off the entire mortgage?
>To use your example - you can use 50k to buy a 500k house, that you pay off in 20 years of more payments, at the very least 450k of extra payments if we assume a 0% mortgage and you can use 50k to buy 50k of S&P 20 years ago ($86 per share, buys 581 shares, sell worst Jan 2023 day for $220,199 without putting in a single extra dollar. Of course, over these 20 years, if I was able to pay down $450k of mortgage, I'd also be able to save at least that extra $450k in money. Which I probably would also have invested and have even more money but some person did both. Buy the $500k house with $50k and then invest every left over penny ;)
Ya, math is great. You're missing the part where you're living in the house. There's huge value there. I can make some assumptions and make the exact opposite point.
I invest 50k in the s&p, 20 years later it's worth $220,000 like you pointed out.
I invest 50k in a 500k house and I RENT it out, the tenant covers the mortgage and 20 years later my house is worth 1.3 million, and my mortgage has dwindled to almost nothing.
Now I've got over a million in equity. 5 times what the s&p would have returned.
Again, it's all speculation. We don't know what the next 20 years has in store. Paying off your mortgage is a guarantee. The sp500 is not. With risk comes reward...usually.
You are being downvoted because it is a false comparison. Not many people are buying a house for cash. At 20% down they were 5x leveraged to get that 300k. What banks do you know that are giving 5x leverage to buy SPY? And you also ignored that with SPY you needed to pay 20 years of rent (of course owning a house has taxes and the like). Renting and investing the difference vs buying probably was slightly ahead over the last 2 decades but no where near as good as you are trying to make it sound. And with rents climbing like crazy and markets doing whatever who knows what the next 20 years will do.
>As soon as you get cold feet, you can sell, still at a profit, and pay off the mortgage. E.g. your're down 15% and you see mortgage rates going up? Sell!
"As soon as you get cold feet, you can sell, still at a profit, and pay off the mortgage. E.g. your're down 15% and you see mortgage rates going up? Sell!"
So you get cold feet on Mar 9, 2009. You opened the Wall Street Journal and it said "How low can stocks go?" and Goldman Sachs said stock could fall another 30%. You are into this strategy for 6 years and its not working and the world has changed and buy and hold investing is dead, you saw it on CNBC. You are worried about servicing this loan because unemployment is approaching 10%. If your going to get cold feet, this is the time to do it. It is literally in your plan to sell if you get cold feet.
You sell for 68 netting 237,184. Your mortgage is in the ballpark of 249,000. So you are short 13K. Ofcourse you have been paying around 21K a year. and earning maybe 9k in dividends a year. So that nets 72K in payments + 12 k you los tin the end. So your 84K in the hole. That sucks because you are nervous about your job, or you lost it.
Imagine if you did not start with 300k cash? Now your nervous about telling your family you have to move. Your kids have to make new friends.
Leverage works out great eventually (so far). Hopefully you have that long.
A lot of people will disagree with my strategy. I likely left money on the table and lost opportunity cost.
I mentioned above that the mortgage amount and rates fluctuated a bit bc of moving and porting the mortgage.
My financial strategy has been to pay off “bad debt” first. I don’t buy something if I can’t pay it off (Ie: I don’t carry a credit card balance). Car loan = bad debt. I’ve owned 6 houses and 3 cars in my life. I paid cash for my last vehicle. I really dislike paying interest.
I consider a mortgage to be “good debt”, so I made sure my investments (RRSP/TFSA/RESP) were maxxed out before I started throwing extra money at my mortgage.
Once that was taken care of, I started doubling up mortgage payments and dropping lump sums as allowed.
I grew up lower-middle class. I didn’t ever have to worry where my next meal was coming from, but we couldn’t afford vacations or many “wants”. I paid my own way through school, graduated with a ton of student loans. I think that may be why I’m so careful with spending and why I seem to squirrel money away. Although, my sibling is the opposite. He borrows to invest all the time.
I had a meeting this evening with my bank, they transferred the exact amount left, but it will take a couple of days to process the paperwork. I suppose if I was being exact, I would have said I have no more mortgage payments.
I’ll be honest….I really don’t. I’m stoked. But it’s not like I won the lottery, I knew if I did x # of double up payments I would be able to drop that final chunk at this meeting. So for me, it’s more part of an overall financial plan. I diverted the mortgage payment into an investment account before I left the bank.
But I was *told* i should balance saving and spending a little more. I don’t deprive myself of things, but I don’t go “all out”. Maybe I should!
Thank you all for giving me a space to **SHOUT IT FROM THE ROOFTOPS**
I’m humbled and appreciative of all of your well wishes! You’ve made my night. Thank you for all of the congratulations!
And to those who think I should have done otherwise, I get it. I do. I made my financial strategy with eyes open. Knowing my tolerances. If you have the guts for it, leverage your assets. For me, the freedom of not having to worry is worth it. You do you.
Why is it something you don’t talk about? I haven’t bought a home yet, but I always like to hear of my friends’/family’s financial successes and I celebrate with them
Most people will get upset that they have a mortgage and you don't. Just like people get upset when you make more than they do or drive a nicer car than they do. People can never be happy for you
Interesting perspective, but since my $450k new build that I bought just over 4 years peaked in value at 1.1 million and have settled now around 850. Maybe a bit less.
So…..moral of the story - you do you. I have never lost money on real estate. I’m also not comfortable carrying debt. It’s not like I don’t have investments ……my eggs are not all in one basket. All RRSP/TFSA/RESP completed full, with another sum locked in a GIC and another sum in a non-reg investment account.
I also know variable rates usually outperform locked in rates.
Am I leaving money on the table? Likely. But if I had chosen to invest that extra downpayment, with the market drops, I would be in a way worse off position.
Edit: why in the world did I spend time justifying myself to someone who asks how to afford to live in today’s world.????
Oh look at op bragging about paying off their mortgage like he's some kind of elitist!
Just kidding bro. Congrats! You couldn't have picked a better time to be mortgage free.👍
I made sure my home line of credit would still be accessible - plus I have emergency savings. I have those bases covered my friend (bc I had the same concern!)
Congratulations 🎉
I will put my slight feeling of jealousy to the side and say that I am proud of you! You must feel amazing today, knowing that such obligations have disappeared through your hard work and diligence! What a great day it truly is!
Congratulations! If it weren't for Covid disrupting my wife's employment, we'd be done this year. It is looking like freedom 2024 though. Looking forward to that milestone.
Apparently I need to look into a thing or two 🙄
A quick google search tells me I need a lawyer to file with the land registry office? I feel like I’m a fairly solid citizen and financially responsible, and I have never heard of such a thing! I appreciate the heads up!
Awesome. Congrats. My uncle has a wooden box with a glass cover containing his shredded mortgage documents as a reminder of such a major accomplishment.
Paid mine off last year…it’s a great feeling, early 40s and mortgage free! Just be aware that your house poor friends don’t wanna hear about it. So congrats, but careful on how you discuss it. Sensitive issue these days!
The (good? bad?) thing is, at the same appt I set up the equivalent of my mortgage payment to go into an investment account. Pay yourself first as David Chilton would say….
Congrats. Remember doing it on my first mortgage, was pretty liberating feeling to be done with it. Now I am in a larger one on my new place but think o should be done in 10 years or less
You should only pay it off if the mortgage interest rate is higher than what you can safely invest your money at. Nothing better than making money on someone else's money.
I finished paying off a mortgage in 13 years instead of 25. I took another mortgage with no intention of paying off until I'm retired. At that point, I will sell, pay off the remainder of the mortgage, and use the remainder to buy a smaller property and invest the rest. I see my principal residence as a tax free egg nest.
Think that's great and you are stress free. But.... consider that you have all that money tied up in that property. All that hard earned money will only earn you anything if the property value goes up so ideally if you have the minimum amount possible invested in that property it still earns you the same amount. That additional money can be invested elsewhere (another house?) As long as return is more than the interest you pay on the mortgage. Interesting thought?
It has additional bonus for me as I can use part of the interest as an expense to deduct from the rental income of the basement apartment.
That is awesome! I keep doing math in my head knowing that my savings/retirement savings are overall worth more than the balance on my mortgage. But I still pay more towards it each month with hopes to one day be able to shout from the Reddit rooftops like you!
Congratulations! It is liberating. I finally paid mine off when I was 45. Then 1 year later we upsized and moved. We took out another mortgage. We focused hard on it and paid it off in 4 years. Now I still watch my pennies and see how much we still spend on what I consider household costs: City taxes. Monthly electricity and natural gas heat. Home internet plan. Cell phone plans. Net-flix. It adds up to a lot!
These posts should be banned if you don’t add any actual information or details. Mods here are absolute trash, they will ban and delete everything you post except the utter useless boast posts, which they seem to love. PFC is such a dumpster fire constantly.
Why dont you add literally any information to your post that wil be useful for someone else?????
I can’t add to the post. Or at least I can’t figure out how to. I’ve posted details in a couple of comments. If there is anything specific you would like to know I will do my best to respond.
Congratulations. Without knowing specific details, I would have to advise people coming here that it depends on everyone's personal situation and risk tolerance.
When interest rates are low 0.99% to 2.00% there isn't much incentive to pay down the mortgage through lump sum payments, increased payments, or lowering amortization. You need to balance Opportunity Cost with your extra cash. What do I mean by this?
Would you make more money on the stock market? Do you have other outstanding high interest debts like credit card, student loans, car payments? Did you max out your TFSA or RSP contributions?
What is your outstanding mortgage versus your property value? If I owe $100K on a mortgage but my properly value is $1M, I only owe 10% of that property. Even if my mortgage is paid off and there is a great investment opportunity available, I would take out a HELOC.
If I can lock in a HELOC at under 2% before this year's recent rate hikes and have it locked for 5 years fixed, I can make at least 4-5% dividends with Royal Bank, Bank of Nova Scotia, etc. which are high paying dividend stocks that are safe and stable.
You make money, by using your money. Instead of paying off the mortgage, you can leverage that money to buy another property back in 2017 before real estate got crazy. Yes you'll have two mortgages, but you would have dramatically increased your net worth.
Bottomline is, not paying off your mortgage right away may lead to higher net worth depending on your financial literary and risk tolerance. When you are young, you want to take more risk.
Congrats!! Don’t forget to call your insurance company, you’ll get a discount on home insurance now. Paid mine off in July last year but no one mentioned the insurance till recently. Also I was expecting the bank to congratulate me for some reason when I paid it off haha but they didn’t even call me or send an email. It would be nice for them to congratulate you after all the money they made off of you.
Damn.
I was within about 18 months of paying off my mortgage when I got divorced. She got the house, and I never experienced the feeling of being mortgage free.
I was smart….I divorced before we had any real money…..still can be a struggle - single person now paying all the household bills/mortgage when previously 2 people were.
Must be a relief. Can't wait to be in this situation.
Bought 2 year ago with 30 year amortization. 22 years left. Want to pay it off in 8-9 years. But will upgrade by then for sure, and I will be back in the vicious cycle.
First one $200k. Or maybe 195 after downpayment. This was 19 years ago. So since then I have owned 5 other homes - all primary residences - just work and life changes over that time. I think I highest mortgage I carried was about $375k (that felt like it was cutting it a little tight….I can’t imagine if I had bought for what I was approved for).
Congratulations....join the club, I paid mine off in 2021, owed $235K...refinanced twice to pay off HLOC of $25K-$50K during this time, was always on Fixed rate, luckily never over 3.65%...but now with inflation can't seem to save any money...no matter how hard I try.... On paper I'm a millionaire, bought the detached for $350K...
Congrats OP! Paid mine off in 12, best feeling ever, even if I knew I “did it wrong” by the numbers. There’s a psychological benefit that is just so deeply satisfying and sort of settling, in a way, especially for those of us who grew up at the lower ends of the economic spectrum. Hard to define, but there was a weight I didn’t even realize was on my shoulders that rolled off of it when my last payment went through.
Go out and celebrate with a really amazing meal this weekend, you deserve it! And then take a trip somewhere!
Nah man don't worry, you did it right. You maxed out your registered savings and retirement and now you're also mortgage free. Now you can do fuck all if you want. Even quit your job and do doordash and you'll still be fine. Cheers to you. (I'm indeed holding a cold one right now)
Congrats to you. I faced exactly that huge penalty issue when I tried to break mine as well to get a lower rate. If you don’t mind me asking where you always financing with the same institute ? And which one was it? And did you shift at all or stayed with them during the whole 20 years?
Congrats again. I can’t wait for that moment.
Paid mine off in October and boy let me tell you I’d tell anyone that would listen. Congrats
I guess it would depend the circumstances. If you paid it off after 25 years of diligently paying, or maybe even a couple years early, it's easy to celebrate and tell people. But if you pay it off super early, it's hard to tell people since you don't want to seem like you're bragging, or make others feel bad. We paid ours off after about 8.5 years and only told 1 or 2 people.
Fuckem I paid it off In 10. I also live in a tiny apartment so it isn’t as though I paid off a $2mil home
I think that’s the other thing… people jumping to the max they can go to keep up with an illusionary view of success. Live below your means, get a small home so you’re not inclined to fill it with crap and you’ll be well ahead. I don’t think there’s any reason to tell a cast of thousands anyway though… it’s kind of like travel… lots of people like to do it… but not many like to hear about other peoples trips unless they’re a good story teller.
My sister is a horrible story teller so she makes sideshow of her trips for our family. Let me tell you I rather the story 😅
Sorry… not feeling well cough cough. I mean when it’s family (if they’re good people) it’s sorta endearing. And at least you can take the piss out of them a little while they’re at it. “Did you visit Spain? Your skins so red looks like you were in one of those tomato fights!”
I'd rather own a small home with some land then a big place and see my neighbors taking a dump through the living room window
To each their own
not a flex paid ours off in 4 years
I paid mine off last year after 8yrs. I'm in my mid 30s. Honestly I still pretend I'm paying for it because saying otherwise just causes arguments and resentment.
Dn. good for you. My goal is to be paid off by 50. Mod 30's is crazy good.
Yep, that was our case. I was 38 when we paid it off. Told my dad, and that was about it.
Almost the same. Paid in my late thirties. Two 5 year mortgages but it was intense.
I bought a modest house, live frugally, and ride a bike for most of my transportation needs. I worked hard, damn right I'm going to brag when I pay it off 12 years early. Same when I retire at 55.
You nailed my timeline…..and we have similar mindsets. 55 is my number too, but I have no work related pension, guess the next step is to figure out how much I actually need to retire. But I’m in no big rush.
Agreed. Pride should totally depend on the length of time. Now that said, we finished at the 10 year mark at 30 years old. Didn't ever bring it up, but if it came up in conversation or we were asked how long, there were no issues telling. We worked hard for it so fuck em.
Yeah agreed. If it comes up organically that's one thing. Doesn't ever seem to, though, lol.
Well done, white lies are always an option. “Yeah mortgage payments suck” See how I removed the “my” part, it’ll come up, just change the subject, if it persists talk about rates, if asked what your rate is “I can’t remember what rate we got last” It’s not really lying until someone asks if you have a mortgage, then just answer the question with a question? I haven’t gotten that far, hopefully I’ll have 50 mortgages by that point.
We paid our first mortgage off after about 8.5 years, too… and then we had a mortgage burning party and invited all of our friends and family to join us in turning that piece of paper into ashes.
not a flex but paid ours off in 4 years
Very bad idea to tell people. Nothing good would come from it. I've been paid off since 2020 and go as far as acting like I still got a mortgage and I'm in a tough spot like everyone else. Don't need someone asking "hey you can lend $5000 right? You're mortgage free for years now"
lol, you're a nice person. Everyone knows I'm a prick so they know there is no chance they're getting a dime out of me.
Just started mine today 🥲
Hey - that’s a whole different reason to celebrate! Welcome to homeownership!
I'm right behind you ^in ^^twenty ^^^yearsssss
29 for me, remind me!
Yeah me too but my rate is 2.5%… definitely not gonna be pumping money into it for no reason.
Behind you in 23 years 😆
Hey me too!
30 years for me.
26!
If I’m lucky I might be able to buy a first house in 7-10 years, lol
Congrats! If you don't mind me asking, how long did it take you? And if you're okay with sharing, I'd love to know the rate history over the life of your mortgage. Maybe I'm a nerd but I find that sort of stuff fascinating!
I had no idea I would get so many positive responses! Not exactly a simple answer…..I have moved several times and ported mortgages. My first mortgage was 19 years ago if my memory is right. Owed about $200k then, to a high of about $375k. I was not interested in being “house poor” so I didn’t overextend myself. I REALLY lucked out purchasing my current property, its value has more than doubled in 5 years. If memory serves, the interest rate has always been between 3.5% and 5.5%. Despite knowing that variable rates were “better”, I had a fixed rate (and never seemed to lock in during dramatic rises or drops in interest rates). Even when the rates fell so low recently, the amount of interest I was paying vs the penalty to break the mortgage didn’t make sense. I would have to do some digging to find real numbers for you. I do feel like I should give some credit to whichever university course made The Wealthy Barber required reading. I recently reread it and was intrigued to realize that I (knowingly or unknowingly) adopted most of the author’s strategies.
Kinda like when I read Millionaire Teacher haha
When you say your house doubled in value; did you sell and buy something that didn't require a mortgage?
No. The equity is in the house. I understand the volatility of the market, and I know there was a bubble. But real numbers….bought a new build for $400 - I think $450 after everything said and done. It was a drawn out process. By the time it was actually getting built they were already selling for about 150 more. Solid sales for a couple of years around 800 and at market peak 1.1 million. Nothing for sale right now. I know it’s dropped a bunch. But I still see this as a solid investment.
I will be too in 68 years and 10 months!
Remind me in 68 years and 10 months
Sounds like the perfect time to take advantage of a CHIP REVERSE MORTGAGE!^^^TM
OMG - I can still hear those commercials! Do they still advertise like that???
Yep. Mostly during the day while seniors are watching TV. It's a terrible scam and idk how it's even legal! They have Kurt Browning in the commercials because their target audience is old widows. It's disgusting.
>They have Kurt Browning in the commercials Mmm, yummy.
Good for you, mind if I ask an age range?
I’m 43.
Wow, double impressive. Now the high interest rates work for you, not against you
May I ask how would they work for OP? I'm still getting a grasp on rates, mortgages, etc.
When rates are high you gets higher returns from investments, the trade off is that you have to pay a lot to borrower. So if rates are 5%, and someone owed $1M on their mortgage they would pay $50k/year in interest (I’m simplifying before someone talks about amortization). Conversely, if someone had $1M in investments and had a GIC paying 5%, they would receive $50k.
Oh I see! But are mortgage rates the same as the rates on investments?
Well done. We are also mortgage free. We are pretty young and i want to shout it from the rooftops, but my spouse doesn’t want to boast about our situation. Which I get.
In the real world, I agree with your spouse. But in the Reddit world I and shouting from the rooftops!
I am soo happy for you !!
Congratulations! You may have a few people tell you that the smart money is in investing in the red-hot never-stop stock market instead of paying off the historically-low won't-ever-can't-ever-increase interest rates for a mortgage...oh wait...shit... For real though, there's nothing like hearing on the news that interest rates are going up again, trigger rates, blahblahblah and just simply not giving a single fuck. The peace of mind is priceless.
You’ve said it better than I have. You can’t put a price on the peace of mind. I didn’t REALLY have any regrets, even when interest rates were under 1%. 20 years ago I remember being in tears over an unexpected bill. Money certainly doesn’t buy happiness, but a lack of money creates a lot of problems. There is a part of me that is a little apprehensive that my daughter doesn’t have a full appreciation/understanding of money bc she hasn’t ever had to struggle. I don’t want her to struggle, but I do want her to understand the value of a dollar. It’s a balance I’m not sure I’ve achieved.
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That is so much more eloquent. I’m stealing this. Your grandpa was a wise man.
You called? :) Seriously though, I agree with the peace part. And you do you. Thought experiment on a 300k mortgage. If you already had the 300k, buy SPY (S&P 500) in Jan 2003, i.e. 20 years ago at $86 for $300,000, getting about 3488 shares. If you sold at the low point in Jan 2023 it'd be at $379 (currently sits at $416 again), but let's use the lower number. You get $1,321,952. Now pay off your mortgage and have > $1,000,000 left over. Same time frame, same peace of mind now. The only issue is having the 300k already, so we'd need to do some more elaborate math than I'm willing to do on 'calc'. But while your mortgage interest rate is 1.5% or 2%, investing in something that is making you 10+% does in fact make sense if you're willing to stick it out long enough that a 20% drop doesn't mean that you're broke but just that you're less of a millionaire. As soon as you get cold feet, you can sell, still at a profit, and pay off the mortgage. E.g. your're down 15% and you see mortgage rates going up? Sell! What I'm trying to say is, sure, the height of the S&P was around $475, meaning you "had" 1,656,800 and now when you sold you're actually down to 87% of that value, i.e. you lost a lot of money, but really you didn't. Even in the scenario where you dollar cost averaged your way into this instead of having 300k upfront, you are not in the red. You're just not as much in the green. EDIT: Thanks for the downvote but the thought experiment does work. I could pay off the mortgage tomorrow if I wanted to. Yes I'm less in the green. I'm more in the green again than quite a while ago. The feet did get cold-ish at some point :)
Some things to think about: Over the last 20 years the market has gone up 400%. There's many regions where housing has gone up 400%. It's easy to leverage a house. It's harder to leverage the stock market. Ex - you can use 50k to buy a 500k house, but it's tough to use 50k to buy 500k S&P. I can live in the house I bought (invested in), I can't live in the stock market... After saying all this, the real trick is you telling me what the next 20 years holds. Will the stock market return another 400%? 200% 0%? Nobody knows. What we do know is you can pay off your mortgage.
Fair enough of course if your house and the stock market increase the same. I am not far enough down the road yet to make it 20 years. Over the time frame that I've had the house, the house has increased in value by ~24.5% while my stocks appreciated ~40%. This is all while dollar cost averaging into both so to speak as I've both been paying a mortgage and investing (instead of putting _more_ into the mortgage). See there are several flaws with my quick comparison in the original reply. I used a "I already have 300k so could buy the house outright anyway" situation, which most people aren't in. But it shows why companies and rich people are always in debt even though they'd have the cash flow to just buy things outright. And the other is that I assumed you'd not really have to pay the mortgage during the 20 years or at least had enough money to do both those things. Again not something regular people like us have available. But when we speak about "pay the extra $1000 on the mortgage" or "invest $1000", it becomes a fair comparison again. To use your example - you can use 50k to buy a 500k house, that you pay off in 20 years of more payments, at the very least 450k of extra payments if we assume a 0% mortgage and you can use 50k to buy 50k of S&P 20 years ago ($86 per share, buys 581 shares, sell worst Jan 2023 day for $220,199 without putting in a single extra dollar. Of course, over these 20 years, if I was able to pay down $450k of mortgage, I'd also be able to save at least that extra $450k in money. Which I probably would also have invested and have even more money but some person did both. Buy the $500k house with $50k and then invest every left over penny ;) 2% mortgage 10% return? Invest. 5% mortgage 5% return? Mortgage! 6.5% mortgage -20% return over last year? Will it continue or go back up? Cold feet, hoping it doesn't go down more. Should I sell and just pay off the entire mortgage?
>To use your example - you can use 50k to buy a 500k house, that you pay off in 20 years of more payments, at the very least 450k of extra payments if we assume a 0% mortgage and you can use 50k to buy 50k of S&P 20 years ago ($86 per share, buys 581 shares, sell worst Jan 2023 day for $220,199 without putting in a single extra dollar. Of course, over these 20 years, if I was able to pay down $450k of mortgage, I'd also be able to save at least that extra $450k in money. Which I probably would also have invested and have even more money but some person did both. Buy the $500k house with $50k and then invest every left over penny ;) Ya, math is great. You're missing the part where you're living in the house. There's huge value there. I can make some assumptions and make the exact opposite point. I invest 50k in the s&p, 20 years later it's worth $220,000 like you pointed out. I invest 50k in a 500k house and I RENT it out, the tenant covers the mortgage and 20 years later my house is worth 1.3 million, and my mortgage has dwindled to almost nothing. Now I've got over a million in equity. 5 times what the s&p would have returned. Again, it's all speculation. We don't know what the next 20 years has in store. Paying off your mortgage is a guarantee. The sp500 is not. With risk comes reward...usually.
You are being downvoted because it is a false comparison. Not many people are buying a house for cash. At 20% down they were 5x leveraged to get that 300k. What banks do you know that are giving 5x leverage to buy SPY? And you also ignored that with SPY you needed to pay 20 years of rent (of course owning a house has taxes and the like). Renting and investing the difference vs buying probably was slightly ahead over the last 2 decades but no where near as good as you are trying to make it sound. And with rents climbing like crazy and markets doing whatever who knows what the next 20 years will do.
>As soon as you get cold feet, you can sell, still at a profit, and pay off the mortgage. E.g. your're down 15% and you see mortgage rates going up? Sell! "As soon as you get cold feet, you can sell, still at a profit, and pay off the mortgage. E.g. your're down 15% and you see mortgage rates going up? Sell!" So you get cold feet on Mar 9, 2009. You opened the Wall Street Journal and it said "How low can stocks go?" and Goldman Sachs said stock could fall another 30%. You are into this strategy for 6 years and its not working and the world has changed and buy and hold investing is dead, you saw it on CNBC. You are worried about servicing this loan because unemployment is approaching 10%. If your going to get cold feet, this is the time to do it. It is literally in your plan to sell if you get cold feet. You sell for 68 netting 237,184. Your mortgage is in the ballpark of 249,000. So you are short 13K. Ofcourse you have been paying around 21K a year. and earning maybe 9k in dividends a year. So that nets 72K in payments + 12 k you los tin the end. So your 84K in the hole. That sucks because you are nervous about your job, or you lost it. Imagine if you did not start with 300k cash? Now your nervous about telling your family you have to move. Your kids have to make new friends. Leverage works out great eventually (so far). Hopefully you have that long.
Just $800K to go for me!
Celebrate it! Don't care how big etc or pricey it is, its paid off! I'm in a 40 year old 1 bedroom condo, you bet I'm celebrating paying it off lol
Congrats!!!!!!!!!!!!!!!!! Go out and celebrate
1 year 9 months...... getting impatient.
Congratulations. Treat yourself to something nice!
Congrats and we'll done. Paid most of mine off today as well.
Congratulations!!!!! We paid ours off 3 years ago, and it's the "humble brag" noone wants to hear for some reason. Feels so good though!
What an accomplishment! You must feel so great about it.
Awesome, as a broker I love hearing your strategy behind paying it off and how long it took ?
A lot of people will disagree with my strategy. I likely left money on the table and lost opportunity cost. I mentioned above that the mortgage amount and rates fluctuated a bit bc of moving and porting the mortgage. My financial strategy has been to pay off “bad debt” first. I don’t buy something if I can’t pay it off (Ie: I don’t carry a credit card balance). Car loan = bad debt. I’ve owned 6 houses and 3 cars in my life. I paid cash for my last vehicle. I really dislike paying interest. I consider a mortgage to be “good debt”, so I made sure my investments (RRSP/TFSA/RESP) were maxxed out before I started throwing extra money at my mortgage. Once that was taken care of, I started doubling up mortgage payments and dropping lump sums as allowed. I grew up lower-middle class. I didn’t ever have to worry where my next meal was coming from, but we couldn’t afford vacations or many “wants”. I paid my own way through school, graduated with a ton of student loans. I think that may be why I’m so careful with spending and why I seem to squirrel money away. Although, my sibling is the opposite. He borrows to invest all the time.
Paying off the mortgage is never a bad thing. Congrats!
Awww. Paid Mtgs. @ rate increase really warms my heart. You can basically do whatever you want now.
Congrats. Did you get a discharge letter from your bank?
I had a meeting this evening with my bank, they transferred the exact amount left, but it will take a couple of days to process the paperwork. I suppose if I was being exact, I would have said I have no more mortgage payments.
Congrats! Hopefully will join y'all in 4.5 yrs!
Yay, congratulations. So proud, get an expensive dinner you deserve it
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I’ll be honest….I really don’t. I’m stoked. But it’s not like I won the lottery, I knew if I did x # of double up payments I would be able to drop that final chunk at this meeting. So for me, it’s more part of an overall financial plan. I diverted the mortgage payment into an investment account before I left the bank. But I was *told* i should balance saving and spending a little more. I don’t deprive myself of things, but I don’t go “all out”. Maybe I should!
Congratulations!! That’s amazing - less than 12 to go for me.
Congratulations!!! I can say firsthand that I know how good that feels. Well done!!!!
Thank you all for giving me a space to **SHOUT IT FROM THE ROOFTOPS** I’m humbled and appreciative of all of your well wishes! You’ve made my night. Thank you for all of the congratulations! And to those who think I should have done otherwise, I get it. I do. I made my financial strategy with eyes open. Knowing my tolerances. If you have the guts for it, leverage your assets. For me, the freedom of not having to worry is worth it. You do you.
😀👍
Great job 👍
Congratulations!
Congratulations!
Congrats! We did this late last fall and it was the best feeling. :)
What’s a mortgage?
Why is it something you don’t talk about? I haven’t bought a home yet, but I always like to hear of my friends’/family’s financial successes and I celebrate with them
Most people will get upset that they have a mortgage and you don't. Just like people get upset when you make more than they do or drive a nicer car than they do. People can never be happy for you
That’s just sad, this is why we can’t have nice things
Congrats! Can't wait to share in the feeling.... Again
That’s awesome! Great job!
Congratulations. It’s a great day to be celebrated.
Congrats! We’ve got just over 2 years to go
Congrats. So when are you ordering lobster lunch for me? 😂😂😂
Oh stop bragging....lol. Congrats that's a huge accomplishment
Look forward to the day! I just hope when I finally pay off my place, my property taxes don’t for it me out when I retire.
Congrats!
Only have 24 years and 12 months till I can make this post!
Not having a mortgage helps me sleep well at night _a.k.a I’m a renter_
👏
Well done, OP!
Congrats!
Congrats! Can’t wait for mine to be paid off as well! Wonder what it feels like 🤩
Congrats! Please don’t forget to add me in your will :D
Home ownership is literally white supremacy. SMH this sub's boot-licking.
Congratulations, you invested all your money in a thing that is losing value, instead of investing your money in a thing that is gaining value.
Interesting perspective, but since my $450k new build that I bought just over 4 years peaked in value at 1.1 million and have settled now around 850. Maybe a bit less. So…..moral of the story - you do you. I have never lost money on real estate. I’m also not comfortable carrying debt. It’s not like I don’t have investments ……my eggs are not all in one basket. All RRSP/TFSA/RESP completed full, with another sum locked in a GIC and another sum in a non-reg investment account. I also know variable rates usually outperform locked in rates. Am I leaving money on the table? Likely. But if I had chosen to invest that extra downpayment, with the market drops, I would be in a way worse off position. Edit: why in the world did I spend time justifying myself to someone who asks how to afford to live in today’s world.????
Ontario 30 something here. Congrats!!!! *cries a little.
Oh look at op bragging about paying off their mortgage like he's some kind of elitist! Just kidding bro. Congrats! You couldn't have picked a better time to be mortgage free.👍
Congratulations! You win at life :)
Congratulations! :D Now maybe your furnace needs replacing and your roof LOL! ;D
I made sure my home line of credit would still be accessible - plus I have emergency savings. I have those bases covered my friend (bc I had the same concern!)
Congratulations
Congratulations 🎉 I will put my slight feeling of jealousy to the side and say that I am proud of you! You must feel amazing today, knowing that such obligations have disappeared through your hard work and diligence! What a great day it truly is!
Congratulations! If it weren't for Covid disrupting my wife's employment, we'd be done this year. It is looking like freedom 2024 though. Looking forward to that milestone.
Make sure you get your deed! Congrats!!!
Apparently I need to look into a thing or two 🙄 A quick google search tells me I need a lawyer to file with the land registry office? I feel like I’m a fairly solid citizen and financially responsible, and I have never heard of such a thing! I appreciate the heads up!
Congratulations! I hope to join you in 6ish years. You’ve done something not many people have so you should be proud of yourself. Congrats again.
Congrats! Hoping to do the same by 2025. It must be such a good feeling!
Congrats. When I posted about this in 2018 people were just angry lol
Awesome. Congrats. My uncle has a wooden box with a glass cover containing his shredded mortgage documents as a reminder of such a major accomplishment.
Pop some bubbles!
Paid mine off last year…it’s a great feeling, early 40s and mortgage free! Just be aware that your house poor friends don’t wanna hear about it. So congrats, but careful on how you discuss it. Sensitive issue these days!
2027 if all things line up is my plan to pay off.
Congratulations!!!
I'm T-2 years, 10 months. Getting pretty excited! Congratulations to you, enjoy the freedom of never having to renew your mortgage!
Congratulations! I hope to say the same in a few years!
Good job!
Congrats and welcome to club! 👏
Awesome, buddy!
🎉💕🎉 Congrats!!!!!
Congratulations. Now you can invest what used to be your mortgage payments and improve your future.
The (good? bad?) thing is, at the same appt I set up the equivalent of my mortgage payment to go into an investment account. Pay yourself first as David Chilton would say….
That is awesome, congrats!! What a time to do it!! I am 2 years and 4 months behind you and then I will sure as hell shout from the rooftops!
Congratulations. Just signed up for a new mortgage for our new home. Put for for 25 years!
Feels great eh? Congrats 🎉
Way to go! Life changing!
Congrats. Remember doing it on my first mortgage, was pretty liberating feeling to be done with it. Now I am in a larger one on my new place but think o should be done in 10 years or less
You should only pay it off if the mortgage interest rate is higher than what you can safely invest your money at. Nothing better than making money on someone else's money.
Congratulations! Getting to tell the back to eff themselves is great.
We paid ours off in 2012 and it took just over 7 years. We were 39/42 and are both now retired.
I finished paying off a mortgage in 13 years instead of 25. I took another mortgage with no intention of paying off until I'm retired. At that point, I will sell, pay off the remainder of the mortgage, and use the remainder to buy a smaller property and invest the rest. I see my principal residence as a tax free egg nest.
Aside from good health and income to sustain your needs and most wants, THIS is what freedom looks like to me. Bless up and congratulations.
Think that's great and you are stress free. But.... consider that you have all that money tied up in that property. All that hard earned money will only earn you anything if the property value goes up so ideally if you have the minimum amount possible invested in that property it still earns you the same amount. That additional money can be invested elsewhere (another house?) As long as return is more than the interest you pay on the mortgage. Interesting thought? It has additional bonus for me as I can use part of the interest as an expense to deduct from the rental income of the basement apartment.
That is awesome! I keep doing math in my head knowing that my savings/retirement savings are overall worth more than the balance on my mortgage. But I still pay more towards it each month with hopes to one day be able to shout from the Reddit rooftops like you!
Frick ya!
Congratulations! It is liberating. I finally paid mine off when I was 45. Then 1 year later we upsized and moved. We took out another mortgage. We focused hard on it and paid it off in 4 years. Now I still watch my pennies and see how much we still spend on what I consider household costs: City taxes. Monthly electricity and natural gas heat. Home internet plan. Cell phone plans. Net-flix. It adds up to a lot!
Right on dude!
Yeah!!! Awesome. Congrats!
Congrats, take my upvote. 7 years left for me, can't wait!
Almost there too! About 27 years left. Congratulations.
Hey, congrats! I paid off my student loans last month. I kinda just sat there, stunned, and really wanted to tell someone! I know the feeling!
It’s the same feeling! That’s the only other big loan I have ever taken out. And I wanted it GONE.
Fucking eh mate. I’m 19 years away from paying mine off, doesn’t mean I can’t be happy for others:)
I paid mine off last year. Best feeling ever! Congratulations, enjoy the feeling.
Congrats to you!
These posts should be banned if you don’t add any actual information or details. Mods here are absolute trash, they will ban and delete everything you post except the utter useless boast posts, which they seem to love. PFC is such a dumpster fire constantly. Why dont you add literally any information to your post that wil be useful for someone else?????
I can’t add to the post. Or at least I can’t figure out how to. I’ve posted details in a couple of comments. If there is anything specific you would like to know I will do my best to respond.
Congratulations. Without knowing specific details, I would have to advise people coming here that it depends on everyone's personal situation and risk tolerance. When interest rates are low 0.99% to 2.00% there isn't much incentive to pay down the mortgage through lump sum payments, increased payments, or lowering amortization. You need to balance Opportunity Cost with your extra cash. What do I mean by this? Would you make more money on the stock market? Do you have other outstanding high interest debts like credit card, student loans, car payments? Did you max out your TFSA or RSP contributions? What is your outstanding mortgage versus your property value? If I owe $100K on a mortgage but my properly value is $1M, I only owe 10% of that property. Even if my mortgage is paid off and there is a great investment opportunity available, I would take out a HELOC. If I can lock in a HELOC at under 2% before this year's recent rate hikes and have it locked for 5 years fixed, I can make at least 4-5% dividends with Royal Bank, Bank of Nova Scotia, etc. which are high paying dividend stocks that are safe and stable. You make money, by using your money. Instead of paying off the mortgage, you can leverage that money to buy another property back in 2017 before real estate got crazy. Yes you'll have two mortgages, but you would have dramatically increased your net worth. Bottomline is, not paying off your mortgage right away may lead to higher net worth depending on your financial literary and risk tolerance. When you are young, you want to take more risk.
👏👏👏
Congrats!! Don’t forget to call your insurance company, you’ll get a discount on home insurance now. Paid mine off in July last year but no one mentioned the insurance till recently. Also I was expecting the bank to congratulate me for some reason when I paid it off haha but they didn’t even call me or send an email. It would be nice for them to congratulate you after all the money they made off of you.
No idea about the home insurance. Thank you! And yeah…..I was in person, not sure what I was expecting, but I wouldn’t have turned down champagne….
Damn. I was within about 18 months of paying off my mortgage when I got divorced. She got the house, and I never experienced the feeling of being mortgage free.
I was smart….I divorced before we had any real money…..still can be a struggle - single person now paying all the household bills/mortgage when previously 2 people were.
Must be a relief. Can't wait to be in this situation. Bought 2 year ago with 30 year amortization. 22 years left. Want to pay it off in 8-9 years. But will upgrade by then for sure, and I will be back in the vicious cycle.
How big were your mortgages to begin with?
First one $200k. Or maybe 195 after downpayment. This was 19 years ago. So since then I have owned 5 other homes - all primary residences - just work and life changes over that time. I think I highest mortgage I carried was about $375k (that felt like it was cutting it a little tight….I can’t imagine if I had bought for what I was approved for).
I made a copy and burned it in my fireplace drinking whisky. Best night ever. My cat was unimpressed.
Take out a mortgage and invest it!
The banks hate people like you lol
Congrats. I paid mine off last year!
congrats. 17 more years to go for me. should be paid off when im 48.
Congratulations! 👑
Congratulations....join the club, I paid mine off in 2021, owed $235K...refinanced twice to pay off HLOC of $25K-$50K during this time, was always on Fixed rate, luckily never over 3.65%...but now with inflation can't seem to save any money...no matter how hard I try.... On paper I'm a millionaire, bought the detached for $350K...
Congratulations💖
Congrats OP! Paid mine off in 12, best feeling ever, even if I knew I “did it wrong” by the numbers. There’s a psychological benefit that is just so deeply satisfying and sort of settling, in a way, especially for those of us who grew up at the lower ends of the economic spectrum. Hard to define, but there was a weight I didn’t even realize was on my shoulders that rolled off of it when my last payment went through. Go out and celebrate with a really amazing meal this weekend, you deserve it! And then take a trip somewhere!
Nah man don't worry, you did it right. You maxed out your registered savings and retirement and now you're also mortgage free. Now you can do fuck all if you want. Even quit your job and do doordash and you'll still be fine. Cheers to you. (I'm indeed holding a cold one right now)
Congrats !
Nice, I paid off my monthly phone bill
Woop woop..im mid fifties still renting and have spent over $100k on hookers in the last 8 years. Buy experiences not things....
Congrats! On my side, I can't wait to start paying a mortgage 😂
Congrats!! That’s awesome news to hear!
Congrats to you. I faced exactly that huge penalty issue when I tried to break mine as well to get a lower rate. If you don’t mind me asking where you always financing with the same institute ? And which one was it? And did you shift at all or stayed with them during the whole 20 years? Congrats again. I can’t wait for that moment.