Paying off the house early

02-23-2024, 04:09 PM

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#31

MikeLowrrrey

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Originally Posted By guest89⏩

My mortgage is only 2.8% for like the next 28 years so I think it would be stupid to pay it off ASAP. My investment returns have been higher then the market average of 10% since inception so I'd be losing massively to pay my house out early. I also could pay my house off today if I wanted to but again I just think that would be dumb at the interest rate I've locked in.

I'll keep my money in cash/crypto/stocks and pay my 2.8% in interest.

But if you paid the house off early, wouldn't you be able to catch up with the extra $1200 - $1600/month? Assuming you already save $1000, paying off the house means you'd save $2600/month

02-23-2024, 04:11 PM

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#32

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Originally Posted By OliverHeldens⏩

If you have a 3% mortgage, why would you pay that off early? Cash can be used in so many other better ways.

The rational answer is to consider your other investment avenues if you have the options.

In reality, the psychological weight some folks feel by having 'a bank loan' is what they're paying off early. Discussed this on Bogleheads a few times heh.

02-23-2024, 04:11 PM

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#33

nutsy54
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Originally Posted By PShift5⏩

How u do it in 5

- Buy what you can afford, not everything you Want
- Budget, know where your money is going
- Be debt-free, so your income isn't wasted on loan and debt payments
- Throw a big chunk at the mortgage every month, being sure to identify it as extra Principle payments

02-23-2024, 04:13 PM

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#34

nutsy54
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Originally Posted By MikeLowrrrey⏩

Ive always read that paying off a house early is dumb. But wouldnt paying off the house early be the fastest way to escape wageslaving? Rent is a good 35% of our income. With that gone you can fuk off to a minimum wage job.

Are these rich people saying that paying off a house early is dumb...?

My life and monthly budget is a LOT more enjoyable with a paid-off mortgage.

02-23-2024, 04:14 PM

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#35

MikeLowrrrey

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Originally Posted By nutsy54⏩

Are these rich people saying that paying off a house early is dumb...?

My life and monthly budget is a LOT more enjoyable with a paid-off mortgage.

No not from rich people,

Just random parts of the internet misc, reddit, etc.

You're one of the few that say to pay off the house early.

02-23-2024, 04:26 PM

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#36

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Mirin 30 years paid off in 5. Making like 5x the monthly payment every month?

I know that supposedly your money is better served in an index fund since the rate of return is higher than the interest or some chit on a home loan, but the freedom to only have to worry about home insurance and taxes every year would be worth it for me.

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02-23-2024, 04:42 PM

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#37

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I think it's better to have something paid off than to owe money on it. I mean you could use the money to invest otherwise with a greater return but in all reality nothing bad about the house being paid off.

02-23-2024, 05:04 PM

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#38

FelixTheCat1919
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Originally Posted By Jasonw1178⏩

I think it's better to have something paid off than to owe money on it. I mean you could use the money to invest otherwise with a greater return but in all reality nothing bad about the house being paid off.

Paying a sub-3% fixed interest rate loan off early would be flushing free money down the toilet in all but the best of economies, and at the tail end of the loan before the economy has a chance to tank again. Especially when your sub-3% rate is being used on a place you paid 2010's prices on

02-23-2024, 05:11 PM

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#39

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Originally Posted By GuineaDago585⏩

Good luck man, this is fantastic financial discipline. I wish more people I knew growing up had the knowledge about money that you do. For example, my dad bought his home in the 90s and it’s still not paid off. It should’ve been long ago.

I didn't know they had 50 year loans in the 90s.

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02-23-2024, 05:20 PM

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#40

CulturalDecay
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Originally Posted By guest89⏩

My mortgage is only 2.8% for like the next 28 years so I think it would be stupid to pay it off ASAP. My investment returns have been higher then the market average of 10% since inception so I'd be losing massively to pay my house out early. I also could pay my house off today if I wanted to but again I just think that would be dumb at the interest rate I've locked in.

I'll keep my money in cash/crypto/stocks and pay my 2.8% in interest.

Exactly, I'm at 3.4%. You'd have to be a freaking moron to pay it off early if you are under a 5% interest rate......your rate of return just investing in a simple S&P500 tracker will beat that.

02-23-2024, 05:25 PM

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#41

PShift5
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Originally Posted By nutsy54⏩

- Buy what you can afford, not everything you Want
- Budget, know where your money is going
- Be debt-free, so your income isn't wasted on loan and debt payments
- Throw a big chunk at the mortgage every month, being sure to identify it as extra Principle payments

My net income is $5838 and my mortgage+ tax is $3430 I already goofed but I do like the house I got

02-23-2024, 05:26 PM

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#42

PShift5
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I agree with Mike, my goal is to pay off the house early so I can leave the tech field and not feel the debt burden. I wanna maybe do some simple **** like lobster fisherman on the weekends one day to pay my property taxes, not have to worry about performing all the time at work.

02-23-2024, 05:26 PM

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#43

Destor
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Originally Posted By nutsy54⏩

Pay $20,000 in interest to "save" $4,800 on taxes...?

Paying off a mortgage early to "save" a couple % interest when you could probably make a lot more doing any number of other things with that same $$$...?

Being able to write off interest cost is just a bonus, one among many potential bonuses and in which the aggregate bonuses skew this strongly towards not putting extra cash into a mortgage

02-23-2024, 05:30 PM

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#44

NestBrah
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Peace of mind is a huge factor. Knowing you own your own home and no one can take it away from you no matter what happens in the economy, to your job etc... surely that's priceless, especially for more cautious, anxious and highly strung people.

Besides isn't 100% home ownership the ultimate financial goal for the vast majority of people?

02-23-2024, 05:56 PM

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#45

akmerle
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Originally Posted By NestBrah⏩

Peace of mind is a huge factor. Knowing you own your own home and no one can take it away from you no matter what happens in the economy, to your job etc... surely that's priceless, especially for more cautious, anxious and highly strung people.

Besides isn't 100% home ownership the ultimate financial goal for the vast majority of people?

"Vast Majority of People" are financially illiterate phuking morons.

That said, I do see the benefit of paying off a place early if you have a higher interest rate. My last condo was like 6.5%, so I paid it off in like 3 years. Current mortgage is 3% and I'll gladly pay it full term.

The goal is financial freedom, and for anyone with a mortgage rate less than 5% it is EXTREMELY easy to beat that investing elsewhere and not losing some of the tax benefits of having a mortgage. For example, at the beginning of the year I dumped a bunch into 5.5% 6-month CD's because I had the money sitting around not doing anything / nothing planned for it.

02-23-2024, 06:06 PM

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#46

JayDigital
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Originally Posted By PShift5⏩

My net income is $5838 and my mortgage+ tax is $3430 I already goofed but I do like the house I got

Got dang! That's almost 60% of your net income!!! How the fook do you live, man?!

02-23-2024, 06:07 PM

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#47

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30 year loan paid off in 5?

You stuffed up.

Hope you enjoyed making your bank rich being charged all those excess early repayment fees.

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02-23-2024, 06:07 PM

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#48

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Originally Posted By akmerle⏩

"Vast Majority of People" are financially illiterate phuking morons.

That said, I do see the benefit of paying off a place early if you have a higher interest rate. My last condo was like 6.5%, so I paid it off in like 3 years. Current mortgage is 3% and I'll gladly pay it full term.

The goal is financial freedom, and for anyone with a mortgage rate less than 5% it is EXTREMELY easy to beat that investing elsewhere and not losing some of the tax benefits of having a mortgage. For example, at the beginning of the year I dumped a bunch into 5.5% 6-month CD's because I had the money sitting around not doing anything / nothing planned for it.

If you're at sub-3%, you don't even need to "invest the difference" to get ahead on that mortgage deal. You're already winning just by having a rate that is almost always better than inflation has been the last few years. Even in good economies, it's not really worth paying it off early with such a low rate.

People paying 6.5%+? Yeah, pay that chit off early if you can't get refied to a better deal in a reasonable timeframe.

Originally Posted By NestBrah⏩

Peace of mind is a huge factor. Knowing you own your own home and no one can take it away from you no matter what happens in the economy, to your job etc... surely that's priceless, especially for more cautious, anxious and highly strung people.

Besides isn't 100% home ownership the ultimate financial goal for the vast majority of people?

If the economy got bad enough and you fell on hard enough times that you couldn't afford your property taxes, the government would take your paid off house away from you just as fast as a bank would for not paying the mortgage.

02-23-2024, 06:13 PM

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#49

JayDigital
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Currently pay an extra $3.63 each month to round up to a certain number.

2.5% fixed with 26.5 years remaining. Should even stop paying that much extra!

02-23-2024, 06:40 PM

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#50

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7.215% interest rate, barely a year in, paying only like $500 a month extra into principal. Don’t make enough money to really do too much more without having fun. Mortgages are disgusting, but it’s better than renting for sure

02-23-2024, 07:30 PM

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#51

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Originally Posted By CulturalDecay⏩

Exactly, I'm at 3.4%. You'd have to be a freaking moron to pay it off early if you are under a 5% interest rate......your rate of return just investing in a simple S&P500 tracker will beat that.

Beat 5% by a LOT, at least lately. Past two years I’ve thrown approx $60k in the market (NOT on my 3.5%/30yr mortgage)

My index funds (SPY, QQQ, VTI, VOO) are up 15-37%. The only other thing I bought was a bunch of Toyota stock and that’s up 67%.

I could’ve put that in the principle of my house but…WHY?

Honestly, I will probably do a mix of the two even though paying down the mortgage mathematical is not a smart move anyone to think so clearly does not understand finance. But, I could absolutely see myself just throwing 10 or 15,000 per year extra on the principal, knowing that I’m not getting the maximum value for the money but just given a little mix of paying off the house for a **** hits the fan scenario.

02-23-2024, 07:35 PM

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#52

mr.left hook
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Originally Posted By OliverHeldens⏩

If you have a 3% mortgage, why would you pay that off early? Cash can be used in so many other better ways.

Good for tax write off's

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02-23-2024, 07:41 PM

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#53

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Originally Posted By PShift5⏩

How u do it in 5

He's a frauding piece of sh*t... "DURRR I PAID MY HOUSE OFF IN 5 YEARS"... Then proceeds to log on a body building forum and asks questions about his second mortgage... OP is a fking cuck living in his parents basement.

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02-23-2024, 08:24 PM

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#54

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Originally Posted By nutsy54⏩

Chasing a short-term 3% spread, while giving up 10+% long-term investing with no mortgage... is stupid.

The "risk free" 5% return didn't exist when you took out a 2.25% mortgage, so you had to hang around in debt, hoping for rates to change sometime in the future.

over the long term it still makes more sense to keep the 2.25% mortgage open. show me any 20 year point in time that the stock market returned under 2.25%

02-23-2024, 08:27 PM

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#55

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Originally Posted By LogicalLifts⏩

The rational answer is to consider your other investment avenues if you have the options.

In reality, the psychological weight some folks feel by having 'a bank loan' is what they're paying off early. Discussed this on Bogleheads a few times heh.

this. surprised at the number of low IQs in this thread, thinking emotionally and not logically, that is what females do.

02-23-2024, 08:59 PM

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#56

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Originally Posted By MikeLowrrrey⏩

Ive always read that paying off a house early is dumb. But wouldnt paying off the house early be the fastest way to escape wageslaving? Rent is a good 35% of our income. With that gone you can fuk off to a minimum wage job.

Youll find in life people give bad advice for many reasons, think about it, why would someone whos borrowed their maximum for 30 years tell you that you should pay your house off early? They wont be paying theirs off early. So they will tell you its dumb. A renter will also tell you its dumb.

A smart man can see the benefits though. For example you can buy another house easily now and rent it out to the guys who told you that youre dumb.

02-23-2024, 09:05 PM

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#57

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Originally Posted By AlwaysFocus⏩

Youll find in life people give bad advice for many reasons, think about it, why would someone whos borrowed their maximum for 30 years tell you that you should pay your house off early? They wont be paying theirs off early. So they will tell you its dumb. A renter will also tell you its dumb.

A smart man can see the benefits though. For example you can buy another house easily now and rent it out to the guys who told you that youre dumb.

If you had the money to fully pay off a house, like $200-300k lets say, I'd sooner try to wrangle that into down payments for buying multiple properties with mortgages and renting those all out while still keeping the current mortgage

Take some risk brahs, push yourselves

02-23-2024, 09:14 PM

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#58

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paid cash for my first home...lived in it then rented it out and paid cash for another. never had a mortgage and don't think i want one

02-23-2024, 09:22 PM

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#59

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Originally Posted By CulturalDecay⏩

Exactly, I'm at 3.4%. You'd have to be a freaking moron to pay it off early if you are under a 5% interest rate......your rate of return just investing in a simple S&P500 tracker will beat that.

At 3.4%, you're winning just by beating the chit out inflation the past 3 years. Yeah, only madmen pay something with that good of a rate off early. Once you get close to 5%, then things start to change a bit.