Historical: Paying off the mortgage

This posting will be useful for historical reference.

On Tuesday October 16th 2018, our mortgage was paid off.

I personally started having a mortgage in 2005 when living in Orleans.  After selling that house, Vero and I purchased a house in Vars in 2010.

So it took us 8 years to pay off our mortgage of $300K.

We went from a 25 year mortgage, down to 22 years (as soon as you choose accelerated biweekly payments, it automatically achieves this), and over the years, we made lump sum payments when we could.

Upon final calculations, we paid around $50K in interest between 2010 and 2018.  If we had continued paying regular payments for 22 years, it would have been an additional $76K.  This is not including the five years I had a house on my own in Orleans.

By saving up money and putting a lump sum (generally we were targeting $16K a year), we managed to cut 14 years of payments which would have equalled $76K in interest.

Thoughts:

  • I have to admit the first time I dumped a lump sum on the mortgage, it was NOT a good feeling. In essence, you don’t get any instant gratification for throwing money onto your principal.  I wish I would have done some calculations to show me “Hey, if you throw this lump sum on, it’s saving ‘x’ amount in interest and ‘y’ amount of years!  I think that would have made me feel better.  A good example of this is I did some calculations for a friend a few weeks ago and showed them that if they threw $1,000 onto their mortgage ONCE in 22 years, they would save $969 in interest!  That’s quite the savings!  Anyhow, no, no one was around to reassure me I was doing the good thing AND here’s some facts to show you.
  • That being said, it got quite addicting near the last couple of years to see a mortgage pretty close to the finish line. You started coming up with schemes to put more money onto it.  Then you had to pull yourself back and say “No, you still need to drink beer!”

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