15-Year Mortgage Paid Off in 5 Years

15 Year Mortgage Paid off in 5 Years

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During late 2013 while I was traveling out-of-town for work, my wife Nicole found our “forever house”.

This home had everything she was looking for including an attached garage, open floor plan, updated kitchen, walk-in closet and a big backyard on a half-acre lot.  She told me that this was THE ONE and as soon as I got home from out-of-town, I had to see it.

My wife has excellent taste and the majority of the time we are in sync. I wasn’t worried about liking it. I was worried about getting a BIG OLE MORTGAGE to pay for it!

Moving from our small bungalow (my bachelor pad she begrudgingly moved into when we got married) to a ranch twice the size of our current house was going to be a big upgrade for us.

When I got a look at the house she found, I loved it too.  It felt like home instantaneously.  Even the neighbors were perfect.

So … We decided to go for it.


I had a few nerdy money guy rules that we discussed to ensure this mortgage was obliterated in less than 5 years:

15-Year Mortgage

In our first house together, I had made a lot of uneducated first time home buyer mistakes that I didn’t want to repeat. One of those areas I was bound to improve was with the mortgage process.

My first mortgage was based on a 30-year pay off period. 30 freakin’ years to pay it off! I’m sorry … That is just too long to wait to experience true debt freedom.

This time would be different.

When we bought our new house in 2013, the rates were at an all-time low. We got a $200,000 15-year mortgage at a 3% interest rate with no points.

This 15-year mortgage has higher monthly payments of $1,900 (including taxes and insurance), but the bulk of it is going to the principal every month instead of our mortgage company’s pockets. Nicole and I agreed that if we couldn’t afford to pay the larger monthly payments of a 15-year mortgage then we shouldn’t buy the house.

3 years into this home purchase, the 15-year mortgage was one of the best decisions we’ve made so far.

Not only are we paying less interest to the mortgage company by going with the 15-year mortgage over the 30-year mortgage, the mortgage principal has been going down by a sizable amount each month.

Additional Principal Payments

My second nerdy money rule to crush our new mortgage in 5 years was to make additional monthly payments of around $500-$1,000 toward the principal each month.

This required us to dial back our expenses slightly – things like less eating out for dinners, more packing my lunch for work and we cut the cord on cable TV (and we still don’t miss it today).

This consistent monthly payment made a major impact in the dramatic reduction of our mortgage. Yes, we had a 15-year mortgage, but I wanted to turn it into a 5-year mortgage.

Extra Money

My company pays us 26 times per year (every two weeks) as opposed to 24 times per year (1st of the month, 15th of the month). Nicole and I agreed when we bought the house, we would only live off of 24 paychecks annually instead of the 26 we actually received.

So twice a year, we have made a BIG payment on the principal with those two additional paychecks. This consistent biannual payment took a huge bite out of overall principal balance.

I don’t always receive bonuses for work. It depends on how my company is performing or how I perform that year. Last year, I was fortunate enough to receive one for a solid performance. That unexpected money was also sent to attack the mortgage.

Monthly Budget Party

Nicole and I agree to meet every month to create and review a monthly budget. I have dubbed this the “budget party“. She does not find it to be much of a “party” per se, but I figured if I call it a party she might be more willing to show up.

The monthly PARTY consists of pizza and us developing a zero-based budget through Mint where every dollar that we earn each month is committed. This way we were controlling our money instead of money controlling us.

Since paying off the mortgage is a big deal to both of us, we ensure that the extra principal payments are included in this budget each month. Since the additional principal payments are automated, it has become our way of life. It is kind of like when you set up automated retirement contributions. You don’t even allow yourself to realize you have access to that money.

Have Fun

My wife is a good yin to my yang. She likes dreaming for the future with me and having a little less today so we can have more tomorrow. She also wants to make sure we’re enjoying our lives today. With the madness that sometimes comes with my full-time job and two kids under four years old, we both agreed that if we’re going to do this crazy 5-year mortgage pay off extravaganza then we still need to have fun.

Everyone defines fun differently. For us, it meant things like going to dinner with friends, having themed birthday parties for our kids, driving to northern Michigan to visit our family for the weekend, going to Detroit Lions games (more torture than fun really) and doing spur of the moment trips like going to Manhattan for a quick weekend.

The last thing we want is to be house rich and life poor. I can accurately say we’re having fun and excited about the future. Nicole would agree.

Dream Big Dreams

In order to keep us motivated and excited about paying off the mortgage, we constantly remind ourselves why we’re doing this.

With a paid off mortgage, we will be able to go on an epic family vacation every year. We’re thinking Mexico for a week during Christmas or Easter. The warm, beautiful sun will shine on our pale native Michigan skin while we lie on floating rafts in a picturesque infinity pool. I can see it now!

With a paid off mortgage, we’ll fund our kid’s college funds so they will have the freedom to attend college and not worry about student loans.

With a paid off mortgage, we’ll be able to save for our first rental property and begin generating some true passive income. As the passive income builds over time, we will be able to reach financial independence.

These dreams keep us motivated and excited about the day the mortgage is gone for good.

We’re almost four years in now … Including the profit we received from our bungalow, we’ve paid $180,000 of the principal.

As of today (September 2017), our balance sits at $20,000. We’ll pay the balance down to $16k in November and then pay off the entire balance with our savings by December … and that will truly be a life changing Christmas present.

How would your life change if you didn’t have a mortgage?

Author: Andy Hill

Andy Hill, a mid-30’s father of two living in the metro Detroit area, pens the MarriageKidsandMoney.com (MKM) blog taking you through the trials and tribulations of being a young parent and husband who is planning for his family’s future and winning with money.

28 thoughts on “15-Year Mortgage Paid Off in 5 Years”

  1. Let’s be honest here…the pizza has even disappeared from said budget “parties.” But honestly, even though I begrudgingly go through the exercise each month I know it’s really important and I’m glad we do it.

  2. Love this and will share. .remember me when you are ready to buy an investment home. .I’m ready and waiting to help you find your little piece of paradise! ! Spent my first 17 years in Birmingham/Bloomfield when I came here from UK ..Go Wings!

    1. Thank you Gillian! Let’s stay in touch. I’ll need the help. We’ve lived in Bloomfield Township for the past 3 years and are loving it. Great schools, incredible neighbors and close to everything.

  3. Awesome read. Timely, too, as we’re in the middle of refinancing our 30 year, 6.75%, almost 20 years left mortgage to a 15 year, 3.375% mortgage. We’re going to knock off almost 5 years and about $90K in interest.

    I’ve been reading about folks accelerating their mortgages, but not in the way you’ve written about. I like your ideas and am sure that we’ll putting some in place, especially the Pizza Party. 🙂

    Seriously, you offer some great ideas and I’m going to pass them along.

    Thanks for the great info!

    1. Great feedback Keith! Thank you so much!

      Smart move on the refinance – you’ll save a ton of cash with that lower interest rate. Isn’t it insane when you look at the numbers about how much we pay to these mortgage companies?!

      Cheers to keeping more of your hard earned money Keith!

  4. When I paid off my mortgage in 2012, I noticed a huge sense of relief and contentment. While I still have a ways to go for Financial Independence, the extra monthly cash flow really helps to supercharge the investments. It also allows us to loosen the purse strings once in a while, while still saving >60% of our income for retirement.
    The one thing that I did differently than you is that I saved/invested the money in a separate investment account instead of paying more directly to the mortgage. I value liquidity and in the event of an interruption in your income, even though you only have $53,000 left, you are still contracted to pay that monthly payment based on the original 15-year mortgage. Either way is fine and gets us to our goal, but I preferred to have the liquidity of the investment/savings account until I had amassed enough to pay off the entire balance and wipe that monthly obligation from my cash flows.
    Great job thus far… maybe you can have an extra topping on that pizza when the mortgage is paid to zero? 🙂

    1. Today our balance is down to $33k … December payoff here we come! More toppings for everyone 😉

      Ty, I absolutely love hearing that you feel a huge sense of relief and contentment. That is the major goal for me and my family. Relief, contentment and more freedom.

      Congratulations on saving 60% of your income for retirement! You are going to be made in the shade my friend. Thanks for the thoughtful comment!

  5. Awesome!! I’ve yet to come to terms with paying off my mortgage. I have the cash available… However, at 3% I’m still making more on the cash I have then I am paying the mortgage so I continue to hold and make small additional payments. Rounding up to the next 100 and calling it good.

    1. That is also a very smart move! The stock market over the past 7 years has been an excellent place to have your extra money. What a return! For me, I’m excited for the day that I do not owe a dime to anyone. Complete debt freedom just sounds like a place I’m excited to live in.

      Thanks for the comment Tim!

  6. This is awesome! I love reading how someone is destroying their mortgage. My wife and I are trying to do the same thing. It’s a challenge for sure. But the relief at the end I’m sure will be worth it. Don’t let up. Great article.

    1. Thanks so much Chris! Only 6 more months and it’ll be a reality. I appreciate the encouragement. A little sacrifice now for a lifetime of debt freedom. So pumped!

  7. While I applaud your frugalness and ability to stick to a plan, I’ve got to tell you I think this is awful advice. Have you ever run the numbers on what would have happened had you invested the extra money you put into your mortgage? You could have made some IRA contributions, Roth IRA contributions, or even back door Roth IRA contributions. Heck if you would have invested your money into a taxable account, and taken out a 30 year fixed mortgage when rates where at all time lows, I’d be willing to bet you could pay off your mortgage with the assets you accumulated rather than paying down your mortgage. Additionally did you ever think what would have happen if you or your wife or both lost your jobs or became disabled. It’s great to have your home paid off, but with no income and a large part of your wealth tied up in your home, how would you make ends meet. Finally, your comments about your ARM just don’t make sense. Adjustable rate mortgages can adjust up and they can adjust down. An ARM that adjusted in 2009 was about to get very low rates for the next 8 years. Anyone who took out an ARM (as long as the margin wasn’t too high) in 2004-2006 made a very smart move. I get the appeal of paying off your mortgage, I just don’t think it was a very smart move given the low rates available, the fact that the interest on mortgages is tax deductible, and the returns that were/are available in the market. Think of it this way, if an investment advisor told you he had a great investment for you. The returns would barely beat inflation and you money would be hard to get to if you needed it. Would you consider that investment?

    1. Thanks for the thorough and candid feedback, Michael! You’re right. The stock market has been a GREAT place to have your money lately. That’s why I’m paying off my mortgage AND investing in the stock market as well. Right now, I’m currently maxing out my 401k, my Roth IRA and my wife’s Roth IRA. (We recently switched over to Vanguard from Fidelity. I like their transparency and their roster of of low-cost index funds.)

      As for the security of my family, that is always a concern for sure. We have around 6-months in emergency savings (cash) right now so if I were to lose my job (my wife stays at home with the kids) then I’m hopeful that I would find a new one within six months. That’s never guaranteed, right!? That’s why I try to bust my butt at work everyday to exceed the goals set for me.

      Overall, I’m trying to decrease my family’s expenses so I don’t have to make as much money to retire. AND, it’ll feel great in December knowing that I don’t owe a dime to anyone… for the rest of my life.

      Thanks for bringing up these points, Michael! I love talking about it (as you can see from my blog ramblings).

      1. Thanks for taking the time to reply, Andy. I do appreciate it. I know you will be fine, and being mortgage free is a great feeling. But there are other ways to pursue financial independence. I’m not a big fan of debt. But I do think there is good and bad debt. Bad debt is taken out for consumption, and far too many Americans have accumulated that type of debt. Good debt is debt used to purchase a productive asset whose income is enough to cover principal and interest payments. A rental property would be a good example of this type of debt if the rent is more than enough to cover housing payment and continuing maintenance. I wonder what you will do when you obtain a rental property for passive incOn my way. Will you pay extra on that mortgage or will you save the funds for the down payment of the next property. Mortgages allow you to leverage your returns. I know leverage can be scary and damaging if your investment goes awry, but having 20-25 equity should protect you from future declines in housing. Just my two cents. Best of luck to you Andy.

        1. Thanks Michael! I really appreciate the dialogue. When it comes time for the rental properties, we’ll weigh the pros and cons of leveraging versus buying with cash. I have a ton to learn about the rental business! I’m excited for that step in our family’s financial journey.

          1. Andy, if you ever want my input you can reach out to me. I am in the mortgage industry, and I can help. I have a strong desire for people to understand the financial products. I vote in Bankrate.com’s weekly survey of industry experts on the predicted movement of mortgage rates and host a local radio show on Saturday mornings. If you need an email address to contact me let me know.

          2. That’d be great to connect Michael! I’m at Andy “at” MarriageKidsandMoney. I actually have a great idea that you may be interested in.

  8. I googled this idea to see if what I was doing was a good idea! My wife and I may be doing it a little differently. We have just about the same income and we use mine to pay off our new car and the mortgage. We use hers for the fun stuff, monthly house bills and her monstrous school loans. No kids though, 2 dogs! I brought up the idea to her to skimp today and have more shortly down the road! Good luck in your final home-pay- off stretch!

  9. Wowsers, just found this article. Crazy!

    We’re in the process of building a home right now and will be getting a 30 year mortgage. We couldn’t comfortably afford a 15; probably too much house. Still, we’re going to plan on paying it down early. I believe we can save/invest enough money while paying down the mortgage in 20 years. Of course, we could pay the mortgage off earlier, but I like having the balance there.

    What we did agree upon was that any side hustle money will be put toward the mortgage. That’s given me some incentive to make a few extra bucks. I know the math, but hate the debt. For me it’s more of an emotional decision.

    1. Your plan sounds like a smart one! I’m working on a similar strategy to your side hustle saving. With my extra dough, we’ll be saving for our first rental property. Here’s to financial freedom for the both of us!

  10. I have a question. I heard you on the Good Dad Projecf and have been checking out your blog. I like what I am doing, but please help me understand the math and your method. In August 2017, you said that your mortgage balance was $21,000, and that your standard payment is around f $1,900 per month. You further said that you’ve paid an additional $500 – $1,000 extra per month on this debt consistently, and that you will pay off the $21,000 mortgage balance by December.

    How does this math work? Even at 0 interest, simple math would show that that your total monthly payment needs to be $4,200 per month for 5 months to get you to $21,000. That’s significantly above even $1,900+ an extra $1,000 per month.

    Can you help me understand what you are doing through the end of the year, and how you got here? Are you simply paying additional principal or are you doing something like the HELOC method that is intriguing but terrifying to me.

    1. Hi Michael!

      For some reason, your comment got caught in my spam filter. I have no idea why. I’m sorry that this has taken me so long to respond.

      I totally understand your confusion on how we’re going to pay off the $21k we have left on our mortgage. Let me explain… (in fact, I’ll update my article to clear up the confusion too) This month, we’re down to $20k. We’ll pay it down $16k by November. At that time, I’ll request a mortgage pay off quote from my lender. We’ll use $16k from our savings account to completely pay it off by Christmas.

      Simple. Just cash savings. There may be fancier ways of doing it that I’m not aware of.

      No HELOC for me. I’ve been down that road before and I used it like an ATM too much. I’m not a financial expert, but I really enjoy this debt free method. The freedom and flexibility we’ll have in 2018 will be very exciting for our family.

      I appreciate your comment and question. Thanks!

  11. Hi, I really liked your post , but I have some questions , I am 20 and planning to buy my house ( I know it sounds too early, but I really want it ) . But I don’t understand a lot of things , like , do I need a bank loan to buy my house ? Or I just need enough money to afford the down payment ?

    1. Thanks for touching base Deborah! I don’t think buying at house at 20 is too early. That being said, I would highly recommend you spend some time learning about everything that goes into the home buying process as well as the home ownership process. It is one thing to have enough of a down payment to buy a house, but its a whole other thing to take care of a house. I’d recommend going to your local library and reading 3-5 books on how to buy a home and home ownership. You cannot put a price tag on a good education — unfortunately, they don’t teach us these things is school!

      To answer your questions more specifically … Let’s assume the house you are considering costs $100,000. Unless you have, $100,000 saved up, you will have to take a loan out from a bank to buy your home. You’ll want to put at least 20% down (or $20,000 with our sample home). We saved up 40% before buying our home because we wanted to have a monthly mortgage payment.

      Go to a mortgage calculator to understand how much you’re going to pay each month (just Google “mortgage calculator” and you’ll find a good one). Insert the “mortgage amount” which is the amount you’ll be borrowing from the bank – not the total cost of the home, but the amount you’ll be borrowing. So in our case, that would be $80,000. For easy numbers given today’s low rates, assume your interest rate is around 4% at 30 years as a conservative estimate . This will give you an understanding of how much this home will cost you each month for the next 30 years of your life.

      Costs that are not factored into this mortgage payment are … taxes, insurance, gas bill, electric bill, internet, cable, home maintenance, repairs, updates, furnishing, HOA fees (if condo or townhouse), etc. Again, making sure you understand ALL of the costs associated with the home buying process is crucial.

      I bought a house when I was 22 and didn’t fully educate myself of what I was getting into. I could barely make the mortgage payments each month. I ended up taking on 2 roommates to help me pay the mortgage each month. That helped a lot. Do you have friends that would live with you and pay you rent?

      Please email me with any other questions Deborah. Here is another post I wrote that may help you as well … http://www.marriagekidsandmoney.com/5-ways-to-avoid-becoming-house-rich-and-cash-poor-in-a-sellers-market/

      Best of luck!

  12. This is pretty freaking awesome! You guys are my heroes! My wife and I are planning to start our mortgage pay off 1/1/2019 due to house updates and planning for another kid. Can’t wait to start!

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