How many years to be mortgage free?

14871 Views 29 Replies 22 Participants Last post by Rickson9, May 21, 2009

Mockingbird

Discussion Starter · May 8, 2009

I've recently read a story about a couple who paid off their principal mortgage in 3 years.

"How we paid off our house in three years"
http://www.canadianbusiness.com/my_money/investing/article.jsp?content=20060704_150040_5240&page=1

I know this story is rather extreme, but what is your personal goal for paying down the mortgage? (aside from HELOC)
If already completed, how many years did it take you?

1 - 20 of 30 Posts

mfd

· #2 · May 8, 2009

darn I was trying to find that story for the article I referenced in this post http://www.canadianmoneyforum.com/showthread.php?t=312

I would say 15 years if it wasn't for the fact that we intend to move in the next 3 to 4 years and probably take on a larger mortgage.

George

· #3 · May 8, 2009

Within 10 years, no question. Ideally within 6 years or so - it all depends on how much we toss toward the principal as prepayments.

Total time with a mortgage: between 11 and 14 years... not bad at all.

FrugalTrader

· #4 · May 8, 2009

Mockingbird said:
I've recently read a story about a couple who paid off their principal mortgage in 3 years.

"How we paid off our house in three years"
http://www.canadianbusiness.com/my_money/investing/article.jsp?content=20060704_150040_5240&page=1

I know this story is rather extreme, but what is your personal goal for paying down the mortgage? (aside from HELOC)
If already completed, how many years did it take you?

We hope to have our mortgage paid off in 2 years, which will make it 3 years in total.

DrStan

· #5 · May 8, 2009

Mockingbird said:
I've recently read a story about a couple who paid off their principal mortgage in 3 years.

"How we paid off our house in three years"
http://www.canadianbusiness.com/my_money/investing/article.jsp?content=20060704_150040_5240&page=1

I know this story is rather extreme, but what is your personal goal for paying down the mortgage? (aside from HELOC)
If already completed, how many years did it take you?

We did it. Mortgage on our first house paid off in 22 months ($100,000). Then moved to a new house with a $59,000 mortgage, paid off in 16 months. At 31, we're mortgage free and the house is worth about $320K. It's fantastic. I love hearing my friends talk about how much of their income is going towards their mortgages that will be paid off in X years. The sacrifices and hard work were well worth it! Now I can borrow a bit from home equity at preferred rates to invest in high yielding equities.

DAvid

· #6 · May 8, 2009

No option for paid off mortgages?

Rickson9

· #7 · May 8, 2009

There should be an option for "already mortgage free".

Mockingbird

Discussion Starter · #8 · May 8, 2009

FrugalTrader said:
We hope to have our mortgage paid off in 2 years, which will make it 3 years in total.

DrStan said:
We did it. Mortgage on our first house paid off in 22 months ($100,000).....

Wow, very impressive FT and DrStan.

You guys should in MoneySense article also.

Mockingbird said:
If already completed, how many years did it take you?

DAvid & Rickson9, you can still vote.

If never had mortgage, then that's a different story.

Sampson

· #9 · May 8, 2009 (Edited)

Hmm, looks like I'm taking the longest?

After we get to a lower rate next week, we should have our principle residence paid off in 11 more years, so 13 in total.

But we've already upgraded - our first condo would have been paid off in 5 - only because it was a closed mortgage with only 20% prepayment available. We were really conservative with our first place and could have paid it out upfront (before the boom

).

takingprofits

· #10 · May 8, 2009

We bought our home (new from builder) with 10% down and paid it off in 11 years.

Ben

· #11 · May 8, 2009

Length of time left to pay off our mortgage is highly dependent on several things for us (and for all of you as well, I expect). At current payment rate, 15 years - we are prioritizing cash savings at the moment, until early fall. Then, we will go back to a payment rate yielding less than 10 years. With the amount of prepayments we make, it could actually be 5 years before discharged, under current conditions. However, one never knows how the years will go. Having children would certainly mess with any projections I happened to make today. And while I quite enjoy the house I'm in, who knows what 5-10 years might do to my tastes and desired lifestyle? A bigger house would mean jumping back on the mortgage treadmill.

So, there's my complicated response to a simple question!

DrStan

· #12 · May 8, 2009

Mockingbird said:
Wow, very impressive FT and DrStan. You guys should in MoneySense article also.

The math was pretty compelling and the timing was fabulous because I received a huge contract to be done as a sideline over a 2-year period. This required about 50 hours a week, not including my regular work, but was sufficient to pay off the mortgage. Well worth it, and a good argument for secondary sources of income!

michika

· #13 · May 8, 2009

Right now we looking at 18 years, however assuming we can make a few planned for changes in the next couple of years, we're looking at under 12 years, but we're hoping to do it in under 7.

Alexandra

· #14 · May 8, 2009

There should also be an option for "Never".

We have a tenant in our basement, and my husband uses a big part of the main floor as his office. The tax benefits we get from writing off the interest payments on a large part of our mortgage make it more beneficial for us to continue paying a mortgage for this house and invest the tax savings, than to pay it off.

We also have a 40-year mortgage. We will have moved into another house LONG before it's ever paid off.

George

· #15 · May 8, 2009

Alexandra said:
There should also be an option for "Never".

We have a tenant in our basement, and my husband uses a big part of the main floor as his office. The tax benefits we get from writing off the interest payments on a large part of our mortgage make it more beneficial for us to continue paying a mortgage for this house and invest the tax savings, than to pay it off.

We also have a 40-year mortgage. We will have moved into another house LONG before it's ever paid off.

I've never quite understood this argument. Even if your mortgage is 100% deductible (which it isn't - only a portion can be deducted if it's for business use), the math still doesn't add up.

If you have a $200,000 mortgage at a 5% interest rate, you're paying approximately $10,000 in interest each year. At a 40% tax rate, a $10,000 deduction will net you a $4000 tax refund, assuming the entire mortgage is tax-deductible. More than likely, less than 40% of the home is being used for business purposes, meaning that the deduction would be more like $4000 for a $1600 refund.

In essence, you're paying the bank $10,000 so that the government will refund you about $1600 of your taxes. Why do you think this is a good idea?

lazy cdn

· #16 · May 9, 2009

i hope i never pay of my mortgage.
its a tax deductible mortgage, proceeds which i used to buy dividend paying stock.

Phalene

· #17 · May 9, 2009

We have exactly 35 years left on our mortgage (lol, yes, we have a 5% down 40 year mortgage). I'm hoping to pay it off in 10, though- we're with ING, and can make prepayments every month if we so choose. We've already managed to shave more than 3 years off the amortization through payments, and I'm currently a student and DH has only been working 2 years. I think we're doing okay so far!

gwcanuck

· #18 · May 11, 2009

This year!

GregR

· #19 · May 11, 2009 (Edited)

Started with a 25 year mortgage in June 2007.

Two kids later, down to a single income, $13,000 in reno's later and we have 12.7 years left.

But hope to be done in 8 years with any luck and getting back to a double income when kids are in shcool (4 years down the road)

https://www.networthiq.com/people/GregR

Four Pillars

· #20 · May 12, 2009

I'm hoping to have it paid off in about 5 or 6 years - but that's not written in stone - just a nice goal.

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