How we paid off our mortgage in 3 years

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Are you FIRE (financial independence retire early) movement fan who is tired of debt payments? Does worry about your finances keeps you up at night? Did you know that according to Census Bureau data, for homeowners under age 65, the share of paid-off homes is only 26.4 percent?

That means three out of each four families have a mortgage payment! The post will tell you how we paid off $154K mortgage in three years, save hundreds of thousands of dollars in loan interest payments. I propose we improve the statistics by paying off your debt faster, save thousands of dollars, and come closer to your FIRE goals.

1. How it all got started: the truth shall set you free

You may think that both of us make a lot of money, and paying off our debt was always something we wanted to do. No and no. When we started on the journey, we had a very average income. In fact, I worked part-time while raising our third son, and we did not think paying off debt is even possible.

The lightning hit me hard, when one day, after we closed on our mortgage (Jan 2018) I decided to calculate what it would cost if we carry the mortgage as is to term (30 years). I opened Google and typed “ interest rate on mortgage calculator”. I entered our mortgage details and learned a sobering truth: our total mortgage would cost us $277,478 dollars!!

I recall starring at the number, letting the third of the million dollars price tag sip in. The number made me feel sick, I ran to Paul and told him about my learning. We both agreed that there must be a better way than giving banks that much money!!! This was the day when we committed to pay off our debt early.

2.    Make a plan and automate

The next step was to figure out how we can squeeze extra money out of our already tight budget to pay extra towards the principal on our mortgage. This was hard, my part-time job did not pay much, and we figured out that we can afford to pay about $400 extra every month. In exchange we committed to eat out less, save on groceries, and buy used clothing.

The good news was that, according to Dave Ramsey Mortgage Payoff Calculator, adding $400 each month would shorten the life of the loan by almost 15 years!! This is the screenshot of our actual mortgage and the results. The screenshot makes me happy even today. It made me feel like we found the way out of the chase, the shortcut, the way to win!

Once we agreed to the amount, I went to our mortgage website and set up automatic payments to withdraw the normal monthly amount +$400 principal-only payment on the 1st of each month. Automating our payments took the guesswork and decisions out of the picture; things just happened on their own. Magic of technology!

3.    Accelerate: pay down extra whenever possible

So we were wiring the little bit extra every month. One day we received a sizable tax refund from the federal government and I immediately thought- what if we pay the extra on our mortgage??? I got excited and went to the mortgage website and just transferred money out. I recall Paul was not super happy about the rush decision, I was certain.

In fact,  I would get so excited I could not sleep. I would wake up in the middle of the night, open our checking account, wondering when the payment will take place and then watching my mail to see the statement, with the lowered principal to arrive. I t was like a game and I was winning!!! It was such a great moment, receiving the statements and seeing the balance going down month after month.

Each time when we received government subsidy checks for covid, when we received bonuses at the end of the year, or made extra money on the side, we kept wiring extra to the mortgage company. We were determined to close as quick as possible, we got obsessed about being debt-free.

4.    The end of debt story

One day, last December I recall receiving the statement with less than $12,000 in principal left in our account. Something overcame me, and I realize we must pay it off now. It was an odd feeling, almost like a compulsion to close the deal. I went to our savings account and transferred money to our checking, as soon as the transfer came in I wired all our short-term savings to the mortgage company. We still had $2800 left in principal, which we had to wait and pay two weeks later.

Finally, on 01/15/2021, we wired our last payment to the mortgage company. It was an incredible feeling to push “Pay Now” one last time. The second our payment confirmation hit my email inbox, and I felt immediate relief. It is like a million-pound boulder was lifted off my shoulders. Another huge chunk of debt was gone!


Call me weird, but i love personal finance topic. I do. So, later that day, when we paid off our mortgage, I had to online to calculate how much we have saved by paying off the mortgage early, and according to the online calculator, we saved roughly $147,000 by paying off the mortgage 27 years early!!!

When I think about how much time it would take us to make $147K, I smile. Today, we are second mortgage-free and yes, we have a long way to go to get t our goals, but the quick pay off gave me confidence about our ability to focus on the goal and achieve the vision of financial independence.

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