Thursday, July 23, 2015

Mortgage Plan

We currently have a 30 year fixed mortgage owing just under $199,000 at 3.375%.  We are 3 years into our mortgage.  Y and I were talking the other day about retirement and we want our mortgage paid in full prior to retirement.  He is eligible for his full pension when he is 59 or 21 years away.  I decided to run an amortization table with the intent to pay it off in 21 years.  It came out to just under $1110 monthly so I'm starting to pay that amount starting in July versus the $1000 monthly that I had been paying.

I'm happy with this decision but I still struggle a bit with it.  I know I could probably achieve better than a 3.375% return but we are saving aggressively. For the most part, I do disagree with putting all extra money toward a mortgage because of the math behind it.  But I do not want a mortgage in retirement so I'm going ahead with it.

9 comments:

  1. Paying off your mortgage before you retire is a very wise thing to do.

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  2. You could earn more than 3.375% or the market could crash and it take years to make it back. At least 3.375% is guaranteed. Something to consider anyway.

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  3. I think it is a good form of diversification. It isn't like you are diverting all your extra income to it.

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  4. I think your plan makes a lot of sense. And I am soooo jealous! 3.375 is an awesome mortgage rate. :)

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  5. We're on year 3 of a 15 year mortgage and a lot closer to retirement than you and Y are. However, our mortgage will be gon before we retire. Our goal is 8 years (when I am 62/DH is 66), but worst case is 11 years. Either way, before retirement.

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  6. I'm 2 years into a 20 year mortgage, which would bring me to age 62. I would love to get it paid off by retirement too, and since I'm doing weekly payments, I should pay it off 5 years earlier.

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    Replies
    1. Hey Girl! Thanks for stopping by. I wonder how your horses and kitties are doing?

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  7. Good plan. It can be tough to find the right balance between paying off the mortgage early and investing in a retirement fund. :)

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  8. We pay extra and pay bi-weekly plus we have Den's retirement maxed out. We have been in this house for 20 years and will have it paid off in about 7 years. When we first moved in, we refinanced a couple of times and even rolled debt in. I know, its a sin but we were young and broke. But we should have our house paid for before I turn 50.
    I think it is hard when you are in the thick of paying and saving to see the end of the tunnel but just keep plugging away and we will eventually get there.
    My plan is to have everything paid off and our overhead so low that SS should cover everything and what we saved will just be for the extras. We shall see if my plan works in about say 20 years.

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