We Paid 3.5x Our Mortgage Payment…and Will Do It Again!

MortgageLast month, we paid 3.5 times our mortgage payment. In part, it was a good month for side hustling — hello, tutoring before finals — and in part because it was one of the two months a year when I score an extra paycheck. While I didn’t put my entire paycheck towards our mortgage*, I did put a large chunk of it. And now that we’ve got this momentum going, it’s going to be really hard to return to our standard double payment each month.

While I’ve talked a lot about mortgages in general here and I’ve generally alluded to the payments we make both on the blog and on Twitter, I thought I’d lay out all the hairy details in this post. So, if you’d like some more insight into the $200,000+ 30-year mortgage we’re trying to tackle in ten, this post is for you:

The Deadline

We took out a 30-year mortgage at 3.5%, which amounts to just under $1000 a month. This number does not include property taxes since our taxes are not in escrow. We also didn’t pay PMI. Having to pay the bank interest was painful enough. I was not going to put us in a position where someone else got to keep my money until tax time. And PMI seems like an easy way to help people overextend themselves. So, we owed the bank over $200,000 in the span of 30 years. When you crunch the numbers, though, it’s actually more like $350,000 over the span of 30 years. Ouch.

The Realistic Goal

Since paying an extra $150,000 is absolutely dizzying to me, we committed to trying to always double our payments. Essentially, we were going to take a 30-year mortgage and have it paid off in 15 years. Since we bought the house almost a full year before we got married and moved in, we made standard payments for the first year. We had a wedding to pay for, I was in grad school, and we both had new cars. I know, I know. But once we moved in and paid off both of our cars, we started doubling our payments and didn’t look back.

The Dream

Paying off our mortgage in fifteen years would put me at 42 years old. Not too shabby to own a home free and clear in my early forties. I can live with that. But the thing is, I don’t want to. When I first started blogging, I mentioned how whatever money I make side hustling also goes towards our mortgage. It’s not particularly fun, but it’s very addicting. I love seeing the number plummet. There’s something so satisfying about imaging the bank crying when they see a young couple doubling or tripling each payment. Seriously, they do cry, right?

We Won’t Refinance Right Now

There are so many unknowns in our lives right now. Both Mr. P and I need to complete more graduate work to max out our pay scales. Having a house can be a huge money pit. My work might get their act together and actually let me invest in a halfway decent 403b company. We might even trade in our DINK status one day.**

Because our interest rate is fairly low at 3.5% and we’re cruising along with repayments, the fees and hassle of refinancing don’t quite add up. Additionally, if we ever found ourselves in a place where we had to be less aggressive with our repayments, we could simply recalibrate our budget without having to jump through any other hoops. It may not be everyone’s ideal, but it’s what works for us based on our situation and our number crunching.

*I got you, Vanguard.

**This is why I have to blog anonymously. If my mother ever heard me utter these words, there would be a nursery in our guest bedroom before I made it home today.

So Tell Me…Do you own or rent? Have you ever had to tackle a mortgage? What was your strategy? Feel free to leave links!

We Paid 3.5x Our Mortgage Payment…and Will Do It Again!

37 thoughts on “We Paid 3.5x Our Mortgage Payment…and Will Do It Again!

  1. Congrats on the massive mortgage payment – that had to feel amazing! Also, I just learned what a DINK is the other day so I’m feeling pretty cool right now that I didn’t have to Google. My wife and I are 4.5 years in on a 15-year mortgage. I love that it forces us to be aggressive, but I hate that it doesn’t give us any flexibility. If I had to do it over again I’d consider the 30-year because I know I’m disciplined enough to make extra payments and it would give me the flexibility I need when life happens.

    1. Discipline and flexibility mean a lot to me. I’m kind of hoping to put together a better investment plan, and I know that this would give me more flexibility.

  2. Making the bank cry = ❤

    So if all goes according to plan, when would you be mortgage free?

    Can you guys pay it off as fast as you want without penalty? In Canada, the majority of banks will ‘let’ you pay off between 15%-25% extra a year without fees.

    1. We can currently pay it off whenever (win the lotto?) without any fees. Unless it gets sold to another company. Again. I always try to follow the fine print! If I could find a way to sustain the triple plus payment, we’d be done in probably 7 years, if not sooner.

  3. Sounds like you are making great progress on your mortgage!

    We own, have a pretty hefty mortgage and we are already in our 40s. We are (slowly) working on paying down the principal, but are also investing a good deal. Our plan is to simultaneously invest and pay down the mortgage so, even if it’s not paid off when we retire (at 50), we have enough money to pay it off if we want or need to.

    1. Ahhh! It’s so hard to balance both paying down our mortgage quickly and investing. I think if/when the market turns around, we’ll be more aggressive with investing. Part of it also has to do with not having a clear option (no 401k and a terrible 403b) outside of our Roths. I’m currently playing around with a taxable account at Vanguard, and I’m pretty happy with that.

    1. Get in line. You’ll have to fight my mom 😉 Oh my gosh. There’s so much left. I will have to look, but I think we have just under $190k. Cue the throwing up.

  4. I’ve got a mortgage in retirement, thanks in large part to my mid-life divorce. I can vouch that this situation is no fun at all, so do not let it happen to you! The good news is that my rate is around 3.5% because we refinanced a couple years ago and we are paying extra each month. I’d love to say we are making double payments, but that’s just not doable for us. Still, every penny paid now is several pennies we don’t have to pay later. It sounds like you’re doing a fantastic job attacking that mortgage, and I’d say no mortgage by 42 or so sounds really, really great.

  5. I do it all! We own our tiny home in the Bay Area, I own rental property in an undisclosed location, and we were both longtime renters. Since I still pay rent for my Dad, I figure I still qualify as a renter.

    And as of this month *confetti* we’ll be making double payments, too. I’d love to knock off our mortgage in seven years but it’s nearly $300K so that’s not going to be a walk in the park. Added complication: my job isn’t in a stable industry and company, so I don’t know what’s next in the way of income beyond this job – that’s another mystery / puzzle to solve!

    1. Confetti storm for you, for sure! You never cease to amaze me. I love following you on Twitter and on your blog. You unravel puzzles so well. I’m always getting new ideas!

  6. I’m so happy for you guys! It’s awesome that you can do that and you’ve built yourselves up where you can actually afford to. I look forward to that day! So much!

  7. Christie says:

    Congratulations on all the overpayments and the early payoff goal! I think it’s great. I know there are different arguments around pros/cons of paying off mortgages early, but I am all for it if it works with a person’s situation. We are trying to pay off ours early, too. It makes sense for our situation for a few different reasons. Plus, paying all that interest to the bank gives me a tiny heart attack every time I think about it. I also love watching our repayment amount tick down.

    And I get it about wanting to keep possible ideas about changing your DINK status on the down low. Our families went bonkers when they found out we had one on the way. Bonkers, I tell you!

  8. JB says:

    Great job on the 3.5x payment. My wife and I are focusing on having our mortgage paid off in the next 15 years as well. We have 2 little ones and it has definitely slowed down our momentum but was well worth it. Keep up the good work and that mortgage will be gone in no time.

  9. I’m with you on the refinancing. Rates have been low for so long that it’s hard to get them enough lower to make it worthwhile, and having the lower required payments gives a lot of flexibility.

    I’m amazed that your mother doesn’t know about your blog.

    1. Good to know I’m not alone with the refi. If she did, she would zero in on this post like no one’s business. I’ll share it with them one day…I think!

  10. I was just thinking about this today. I made my first mortgage payment recently, and the dial moved by $200. That hurt. I want to pay off the house quickly, but I also want to fill up the retirement funds. I’m having a hard time figuring out how much goes to what.

  11. Hey there! Thanks for sharing another great article. Personally I “own” my house and our goal is actually not to pay off the mortgage as fast as I can. Since the interest rate on our loan is so low we are taking the extra money we have to invest in RE and equities. The math adds up and supports our goals of investing in rentals rather than paying off the mortgage asap.

    It’s a personal journey after all and I’m glad you shared the article. Thanks again!

    1. I definitely question if we shouldn’t be putting our money into other investments, but this is what feels right for me now. I’ll definitely swing by your blog to hear more about your plan!

  12. Katelynne says:

    My dream is, once my partner pays off his car loan (which he is busting butt to get done this year),to increase our payments to weekly and increase the $/payment. And then stock as much away as possible to put down a big lump sum when we hit our 5 year refinancing mark. (Canadian!)

    I want to give us as much of a buffer as possible with falling house prices, although so far we are good. Yay past self for stressing out about 20% down.

    I am trying to be realistic that life happens but as soon as that car is paid off, I am itching to be super intense about it

  13. Carrie says:

    We own our house (almost!). We have 4 more biweekly mortgage payments. It has taken us 20 years to get here. We have never doubled-up payments but we reduced our amortization a bit each time we renewed our mortgage (every 5 years, mortgages in Canada are a little different).

    1. Congratulations, Carrie! How amazing does that feel? I hope you’ll come back and let me know when those four payments are done. Virtual confetti will be thrown your way!

  14. We rent right now. The size of my student loans don’t really make me comfortable borrowing yet more money for a residence. Sure, I hate throwing that money away every month but when the water heater breaks of the roof needs to be replaced, I don’t have to divert money away from my other financial goals like paying off debt.

    Nice blog, I’ve added it to my feedly 🙂

    1. Thanks so much, Andrew! Not having loans definitely made the decision to buy easier. That and the fact that rent is pretty pricey here. I actually have a few coworkers who spend more on renting two-bedroom apartments than we do on our house! But when stuff breaks…Ah, it’s such a trade-off, isn’t it

  15. Kel says:

    We refinanced to a 15 year at 3 percent about 3 years ago. We are trying to pay it off faster than that though, and if we did move, I would consider taking a 10 year mortgage like a friend of ours did.

    For us the 15 year made the most sense, it’s a comfortable number within our budget, we have had extra money to do upgrades and the house is 10 years old this year so besides cosmetic renovations it was already pretty “new” when we bought it at 4 years old…hence not really needing any work. We also live in a pretty low cost of living area which I know is also helpful.

  16. You’re my hero, Penny. Mrs. Groovy and I got very lucky and used geoarbitrage in 2006 to wipe out our housing debt in one fell swoop. And we were 45 at the time. You and Mr. P are way ahead us. Keep up the great work. You can’t imagine how less stressful life is when you don’t have a mortgage.

    P.S. I hate that lower education predicates salary bumps on more schooling. If I had my way, teachers would get a salary bump as soon as they got tenure, a graduate degree would be unnecessary.

  17. I rent currently, but have an awful roommate. I’m actively working on getting my finances together to buy a small condo and move away from her. I will do a 30 year mortgage, and then prepay as I like. I appreciate having the option of liquidity. I think my IRA and brokerage investments will be more beneficial for me in the long-term.

  18. The desire for flexibility is exactly why we started with a 30-year mortgage and doubled payments regularly after finishing our student loans that first year. Shortly thereafter, rates dropped and we refinanced to a 15-year and have since doubled those payments. Way to go on your 3.5x payment! That’s quite an accomplishment, especially since you plan to repeat it!

    1. I will probably only double my payments for the rest of this year. But then after tax time, I’ll take my money from freelancing and split it between mortgage and investing. So it’ll close to 3x! I will definitely keep the refi option in mind, Kalie.

  19. Thanks for sharing this post. I personally experienced renting a house, and paid it off monthly as always. But after a few months of paying the rent, we suddenly had no money to pay off the rent and we were starving. It was at that time when I built a house for my family. So, we moved out and paid the remaining balance of the rent, and we’re free from debt.

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