How We Paid Off Our Mortgage in Under Ten Years

Guess what? We paid off our mortgage. That means we have now have no debt. Zip. Zero. Zilch. Nada. Nothing. And do you know what? It feels pretty darn good.

Yes, we’re well aware of the mathematical advantages of keeping your mortgage and investing our extra cash, but we decided to pay off the mortgage for a variety of non-mathematical reasons.

Our mortgage story – in the beginning

We got our first mortgage back in June of 2002. Actually, we got two mortgages back in June of 2002. We didn’t have enough cash on hand to put 20% down, and we wanted to avoid PMI, so we went with an 80/10/10 when we bought our first house.

Our primary mortgage was a 30 year fixed rate around 6.5%, whereas our second had a rate around 8% and was amortized over 30 years, but there was a balloon payment due after 10 years if we still had it.

Anyway, not long after closing on our house, we ended up killing off the second mortgage in favor of a HELOC with a significantly lower rate. Over time, we rebuilt our savings and eventually plugged it into our HELOC to kill of the balance.

Nowadays, I probably wouldn’t recommend this strategy… We essentially rolled our emergency fund into the HELOC to save on interest. It worked well, but the credit markets are now much dicier than they used to be, and there’s always the risk that your HELOC might get shut down.

Anyway, we ultimately rebuilt our savings without ever having to tap the HELOC, and thus all that was left was our primary mortgage. Throughout this time, we were also consistently paying at least a little extra toward principal.

At the same time, mortgage rates had been falling and we decided to refinance to a lower rate. Once again, we opted for a 30 year loan, but our rate dropped into the mid 5% range. The breakeven period was about a year, so it seemed like a no-brainer at the time. We ended up keeping that mortgage for around two years, so we ultimately came out ahead.

Our mortgage story – movin’ on up

In 2006, we ended up moving to another state. We made a tidy profit on our first house when we sold and… Though we ended up moving to a larger, more expensive home, we were able to put down 50% this time around. Unfortunately, rates had drifted back up at this point, so we wound up with a rate a bit over 6%.

As before, we continued making extra principal payments every month, so the balance was spiraling downward. About 18 months later, rates dropped dramatically and we decided to refinance once again. This time, however, we went with a 15 year fixed rate mortgage at a bit under 5%.

This time around, we had minimal closing costs. Thus, even though we ended up paying the whole thing off about 18 months later, we still came out ahead.

Our mortgage story – paying it off

Okay, as I noted above, we’d been consistently making extra principal payments. Over time, these prepayments got more and more aggressive, so our balance was dropping fast. At the same time, we had also been saving and investing aggressively, fueled not only by my day job, but also by my online endeavors.

Fast forward to this past December. After giving it a lot of thought, my wife and I decided to request a payoff statement from our lender and to make a lump sum payment to payoff our mortgage early. After transferring some money around, I headed over to the bank to wire the funds to our lender.

And that’s all she wrote… The funds arrived later in the day, and our mortgage account was updated the next day to reflect our zero balance. From start to finish, this entire process took just about 7.5 years. This isn’t to say that you should pay off your mortgage early, but rather to provide evidence that it can be done if you decide that it’s the right course of action for you.

P.S. Hey Matt, our debt-to-income ratio is zero. πŸ™‚

63 Responses to “How We Paid Off Our Mortgage in Under Ten Years”

  1. Anonymous


    Ok, Here I am just over one year after the comments above and the balance is now $40,740. Nearly $53,000 paid off in a year.

    We are so close. You have to stick to the plan and let time take care of the rest. The years will flow from one to the next and before you know it, you’re done. I still do internet searches for success stories to keep my motivation strong. I’ve gone though all the emotions: resolve, impatience, exhilaration, boredom… You just have to get over the humps, renew the resolve, muster up patience and see your future exhilaration of paying off the mortgages. I’ve now paid off two in the past 2.5 years and three other rental mortgages and my personal residence since in the past five years. That’s a lot of mortgages. I look forward to being debt free and living off the income.

    In the meantime, we’ve travelled to Mexico, Hawaii, Costa Rica, England, and Ireland. Our income has fluctuated between 48k and 104k over that period. We do well but we’re certainly not rich. Spouse has had Thyroid cancer, shoulder surgeries, and a foot surgery in the past five years. We are able to absorb these life blows because we live on less than 50% of our income and don’t buy new cars or spend a lot of money remodeling our modest home.

    You can do it. We are 10 months from getting this done. Thanks again for the inspiration!

  2. Anonymous

    Many inspirational stories here. I’ve read these more than once over the years to keep me focused and encouraged to pay off my rental real estate mortgages. I’ve had 6 at one time totaling more than 250k I’m now down to about 93k with the last two on track to pay off in about 18 months. I’ve been blogging about the experience since January, 2013 when I started with three mortgages totaling $177,650.

    I am so ready to be %100 debt free and able to live off the rental income. These inspirational stories are wonderful. I hope my blog will inspire others too.

  3. Anonymous

    Congratulations on being mortgage free! I also paid off my 30-year mortgage in 9 years. I could have invested the money instead of paying it off but I just hate paying thousands of interest every year to the bank and nothing beats the feeling of mortgage/debt free!

  4. Anonymous

    A fine piece of advice, and a role model for many Americans who are mired in generally accepted world of debt. I grew up with a role model of my grandma who raised 10 kids during the depression era.

    I’ve owned many a car, bought each one for cash. Yes, you can and should save for a car, before you buy it, and there are used cars available in many price ranges – cut your tastes to fit your accumulated savings.

    For a home purchase I think it is acceptable to take a loan, and tax policies do encourage that (mortgage interest deduction). Many overplay this as remarked by “Bid Spender” above, while Dave (#50) correctly points out that the benefit of a mortgage interest deduction is always less than the drain of paying that interest – often this difference is more than you might guess based simply your marginal tax rate. Once you factor in thresholds like the standard deduction, and income thresholds for “stealth taxes” like phaseouts in exemptions and in itemized deductions, it really favors actions that eliminating a dollar in interest payment weighed against reducing a dollar of earned interest by keeping that extra money invested.

    I too managed to pay off my mortgage fully twice. On my first home purchase I scraped and scrounged through whatever savings I had to come up with the down payment to avoid PMI. Took a 15 year loan – because the interest rate at 11.25% (1985) was maybe 0.25% or 0.5% better than a 30 year loan, and I took perhaps 7 years to pay off the mortgage. Refinanced maybe once and had a stressful time with an attempted/aborted refi, where I learned that the mortgage industry was prettty sleazy (hidden costs, fees and poor disclosure).

    On the second home I did take advantage of 0% balance transfer offers from various credit cards several times. Each time I used these carefully woven in to accelerated mortgage payments and savings to pay them before the deadine. Had to put in effort to stay on top of it all, but it did work out for me. I think it took 5 or 6 years to pay off this mortgage fully and incorporated several refinancing cycles during the period from 2000 to 2006 while interest rates trended down. I was fortunate to be able to get zero cost refinancing from GMAC – hence a no brainer each time rates went down about 0.5%. We have been blessed with stable employment for at least one spouse throughout, and are grateful for this.

    No regrets from having paid off the mortgages. Yes the family enjoyed many vacations, and the kids have good schools and extracurricular opportunities. They have done and continue to do great. Active in volunteer activities and an inspiration to the parents.

    Just some wisdom passed to me from my grandma, and I hope I pass on to my kids and every person out there:
    “Waste Not, Want Not”.
    Always live within your means.

  5. Anonymous

    My mortgage will be paid off next month. Was 15 years and we paid it in 7. We’re still young enough to save a lot of money for the futre retirement years. Hopefully it all goes well. I will sell my large colonial now and downsize to a smaller ranch. Less upkeep and cost. My wife rocks, paying off our mortgage early was something we always agreed on and made a joint effort to make it happen, how we’re almost there….A DREAM COME TRUE! πŸ˜‰

  6. Anonymous

    Everyone can pay off their mortgage n 10 yrs or less. Start with a fully amortized 10 year loan. We did and then just paid the balance off last year with 3.5 years left on the loan. Yes the payments are much higher, but the interest paid is so low it’s almost a joke. Then after a number of years the balance is so low you can easily make the final principal payoff in one lump sum.

  7. Anonymous

    This is my story. My wife moved out in 1998 and left me with bills. I gave her $12,000 for her share of equity. I worked my butt off for 3 years and paid off the bills, my truck. I retired, sold the house and moved back to a small town in Illinois. I made an offer on a nice smaller house with 50% down payment and Wells_Fargo for a lender. WF dug up a blight on my credit report and bumped up the interest rate. That made me mad. In 2002, credit was easy to get, so I paid cash by borrowing on my credit cards, $30,000 worth, with zero interest for 6 months and they waived the up front charges. A few months later, a local bank gave me a 30 year loan, with a balloon payment after 3 years. The CC was paid off & I came up with the balloon payment by selling my classic car & cashing in my life insurance. Pretty sweet.

  8. Anonymous

    My husband and I bought a home 2 years ago. We thought he would retire from the military this past summer, long story short he didn’t and we will stay for 3 more years. We hope to have our home paid in full before he retires. Our loan was $200,000. We have never carried debt on our c/c and we live well below our means. Don’t get me wrong, we have a great life, 7 children, we have 2 in college right now, 2 already out of college… it’s discipline and not spending what we don’t have for the past 27 years. I’m a stay at home mom and the peace of mind of never being in debt is priceless. I am no expert but I love financial topics and hurrying to get this mortgage paid off (I hope in 3 years) is my goal.

  9. Anonymous

    My wife and I just paid off our mortgage a few weeks before my 40th B-Day! It’s a great feeling to be completely debt free – especially in these uncertain times. It can be done!

  10. Anonymous

    I Refinanced to a 15 year term December 2010 and with making large principal payments each month I project to pay this puppy off in 32 months.

    $208,300 @3.875

    I don’t care what anyone says this Mortgage is going down.

    I’m no longer in the tax deduction club, I WANT OUT!!

  11. Anonymous

    We just paid off our 30 year mortgage in about 9 years! After saving and investing regularly in mutual funds for over a decade for college/emergencies only to have lost money, we decided to sell those investments and put it towards reducing our mortgage which was at a fixed rate of 5.75%. My personal goal was to have the mortgage paid off and be completely debt free by my 44th birthday which is next month. The plan now is to take what we were paying on our mortgage P&I and put it aside for college savings. The way I see it, we are getting a guaranteed 5.75% return on that money for the next 21 years even if we just let it sit in a money market fund.
    Yea I know the tax deduction argument ( which I don’t agree with btw, I pay the bank $7K/year in interest so I can save $1,750 on taxes??? ) and the cheap money argument when taking inflation into account. The bottom line for us is the peace of mind in knowing that we do not owe anybody for anything.

  12. Anonymous

    There actually are no mathematical advantages to not paying off a mortgage. The tens of thousands of dollars spent on interest will never come close to the lessor income tax mortgage deduction. Like wise, the differnece of extra interest earned by investing instead of paying off the mortgage can not be weighed evenly against the huge risk of that size of debt.

    Don’t believe me, just ask one of the millions Americans that have lost their homes…..

    Debt is risk, pure and simple.

  13. Anonymous

    Anyone that has deployed overseas as either a contractor or service member has no excuse not to pay down debt. As of 10NOV10, I paid off my mortgage with income tax free (not tax free as advertised because I still pay SSI) from two combat deployments.

    born April 2003
    died November 2010

  14. Anonymous

    What is important to remember is that vacations can be had without compromizing your long term debt free goals. We have a great time fishing, camping, swimming at various inland lakes, picniking, bike riding and just enjoying each other’s company. There are so many vacation opportunities that do not break budget and if the kids get used to budgeted vacations from early on they will never know the difference. We are surrounded by parks and lakes so it is easy for us. One vacation idea that has worked out awsome for us is to get a cleaning lady who cleans, does laundry and cooks dinner for us while we explore the parks for the day. There is nothing like coming home to a clean house and a home cooked meal after swimming, hiking and biking all day. Great vacation for under $200.00 and there is no place like home. One year we did this for 3 days, the best $400.00 ever spent(She only had to do thorough house cleaning and laundry the last day) This was when gas prices were outrageous and our children were so little that hotel stays were hell. While we are not in a hurry to pay off our 15 yr. mortage at 4.25% we do everything that we can to be careful spenders so that we can enjoy life without money stress. For those of you who need numbers to see if this is possible for you, let me tell you what was once said to me that changed my outlook on money, if you always spend less than you make, you’ll always have enough.

  15. Anonymous

    That is a great job! I also like that someone commented earlier that while they are trying to make as many extra payments as possible, they aren’t cutting things out like vacation with the kids. It is important not to become a slave to paying off the mortgage. If you have kids it is the best time of your life and don’t regret that you didn’t get those season tickets to the baseball team or vacations to the beach because you wanted to pay off the mortgage. The good times with family and friends is certainly worth the 5% interest I pay on my 185k mortgage. I find the mix in my life perfect as I balance a mortgage with other fun family and personal stuff (I have no other debt and a solid emergency fund and 401k) AND giving to charity. Remeber, when you get to the pearly gates you get no extra crown for owning your home.

  16. Anonymous

    Congrats. I did the same thing in October ’08 when the economy almost collapsed. At least they cant take away our homes…as long as we pay the property taxes. I got rid of all other debts too.

  17. Anonymous

    Excellent! It’s wonderful that you can pay down your mortgage so quickly. But for most homeowners, I think it makes more sense to NOT payoff the house and save the cash just in case of a job loss. The economy is not recovering anytime soon and jobs will be unstable. In this current economic downturn, cash is king.

  18. Anonymous

    Good job! I’m getting excited, since I will have my home mortgage paid off next month.

    I hope you have plans for the additional money you’ll be able to save, I’ve been floundering trying to make sure I have the correct mix for the additional funds.

    Perhaps I should just put it in some ETF index fund or something similar…

    Then again, maybe gold (it’s priced aweful high right now though)… The asset diversification would be nice to have.

  19. Anonymous

    I am so inspired. I hope to pay off ours in 5 years. We only purchased our first home 4 months ago, but are currently renting it out to help pay it off. We are a one income family at present and I am trying to make extra money in various pursuits ‘on the side’ to increase our payments.

    I know people say that a homeloan is good debt, but if you can pay it off, I would say that it is ‘great debt’, that being $0!

  20. Anonymous

    Congrats; that’s great. I wouldn’t apologize for the “market investment would have been better” in a decade when stocks were flat (lost money to inflation). While someone in the 90s would have done better investing the excess cash, you did the right thing. Congrats again!

  21. Anonymous

    Good for you! Paying off a mortgage ahead of time requires tremendous determination and sacrifice. Congratulations on truly owning your own home. What a great start to 2010.

  22. Anonymous

    Congratulations! But you’re going to need some more deductions so that you’re not just shifting your mortgage interest money to Uncle Sam’s tax redistribution fund.

  23. Anonymous

    @John: Yeah, definitely do not consolidate via LC if that is the case.

    Stay focused man, you’ll get there – it sounds like you have the right mindset, so now all you need is to faithfully execute your plan!

  24. Anonymous

    @ Matt

    I looked at LC for a loan, but their rate was going to be 12%+. My aggregate CC rate is going to be around 5% with all the introductory rates I can get, so I can’t justify that extra cost just for a simpler payment system. I look forward to the day that my mortgage and student loan are set up on auto and all other debts are paid, but for another year or so I have to stay focused and keep up with all of the bills.

    I have started investing a little in Lending Club.

  25. Anonymous

    Congrats FCN! Thats amazing.

    I am with Flexo and his smiling Gravatar – where is the extra money going? Businesses (online or otherwise), brokerage accounts?

  26. Anonymous

    Congrats!! Gives me inspiration for doing something similar with my student loans (still in grad school, so I’m not “supposed” to pay them off yet). Good to see stories of people who pay their mortgages off quickly to know it can be done. Would be interesting to see the numbers, too – how much you were throwing at it each month.

  27. Anonymous

    Sounds great! ! ! Our story:

    1st home purchase (in 2001) with an 80/20 piggyback (the 80 – 30yr 7.5% fixed/the 20 – HELOC), refinanced in 2005 (paid off the remaining HELOC amount) to a 15 yr. 5.375% and now making twice the regular monthly payment each month – should be mortgage free in about 4 years . . .

  28. Anonymous

    @John #19: If you’re looking to simplify, do what I did and consolidate that debt through Lending Club (only if you can decrease all loan rates and come out ahead on interest payments of course.)

    Nickel… all I have to say is… you da man! Ahhh… I cannot wait for the days of ZERO DTI in the Jabs homestead.

  29. Anonymous

    Congrats! We’ve got 8 years and 4 mos at the rate we are paying ours. It’s very hard to do with 3 kids and a stay at home husband, but we are doing it! Although, truth be told, we could do it faster if we gave up the vacation money, but hey, we only have so many years to make memories with the kids, right? And we aren’t giving up the fun stuff.

    and ryan, correct me if I’m wrong, but you just want to know if nickel is just like the rest of us? Is what he did a reasonable feat for the rest of us? And that’s hard to tell when there are no real numbers in this story. I think the biggest point is just like he said…”to provide evidence that it can be done if you decide that itÒ€ℒs the right course of action for you.” So many people live like it’s unnatural to NOT have a mortgage. So they buy/finance more house than they should. Or they refinance (sometimes over and over again) to “cash out,” putting themselves further and further in debt. But I’m with Nickel, I think people should go INto mortgages with the goal of paying it off someday, especially before retirement. People need to know that it’s OK to NOT have a mortgage (or a car payment!). Those people who get out of debt (rather than getting into more debt) will come out far ahead in the long run.

    And what will you do with the extra money? Was the prepayment simply to say you have no mortgage? or was there a goal for the extra money? For us, our payoff date is the summer before our oldest goes to college so we can provide extra help with college costs, if we need to.


  30. Anonymous

    I’m currently on pace to pay off my 15-year mortgage in under 13 years or 12.5 years from now. I’m sure I will have more opportunity to pay it down faster, but first I need to eliminate some of my non-mortgage debt. I am shifting debt around to multiple CC accounts in order to save on promotional interest rates, but it’s tiresome. I am making 7 loan payments/month right now. Some are automatic but I want to simplify this.

  31. ryan: It certainly didn’t hurt, but keep in mind that we also moved up to a larger (more expensive) house after we sold. Thus, we still had to pay off a 50% mortgage on a pricier home after the dust settled on the sale of the first home.

  32. Anonymous

    Hmm, not to sound like a jerk but why is this impressive?

    I paid off my $10000 mortgage in 6 months instead of 30 years… Yay me!

    My point:
    This story is a lot more useful if we know how much the mortgage was for along with a sense of what your income bracket is…

    If you’re grossing $400,000 a year and have a $150,000 mortgage, I would be surprised if you didn’t pay it off in under ten years.

  33. Anonymous

    Dude, you are my hero! Amazing job! We plan on making some extra payments this year on our mortgage, but we’re nowhere near this milestone yet. we’ll need a few more years.

    Must feel great to have that DTI of zero!

  34. Anonymous

    the selling your house with a tidy profit was probably a key contributing factor here, and these days that’s not going to work… at least for a few more years.

  35. Anonymous

    Wow…simply refreshing (and amazing). Congratulations. I’m not there yet, but I’m aggressively paying off non-mortgage debt this year. Most people have no idea how much they spend on interest fees each year. Once I saw that figure, I got laser-focused. It doesn’t matter how low your rate may be when you are still paying a three or four figure amount each month just in interest. Money that could be saved for retirement, invested in a business venture, or whatever!

  36. Anonymous

    This is an amazing story! My wife and I are in the middle of paying off all non-mortgage debt. Hopefully, this will be done in about 2 years. After that, we’ll pound away at the mortgage. If all goes well, we’ll have it paid off in less than 10 years as well.

  37. Anonymous

    Amazing job.. I hope to one day be there.. from the sale of my current condo I will make 50k which will eliminate my CC debt, pay off my other debts and give me a sizeable downpayment on my new place…

    then I can work towards making extra yearly payments to my mortgage..


  38. Anonymous

    That’s the second huge debt accomplishment I’ve read about today. Did you see Paul @ Fiscal Geek’s post about how he and his wife have paid off all their non-mortgage debt? It was something like $63,000 in 11 months. Story is here:

    Congrats to both of you! Your stories are a great example of what can be done when you focus on a goal.

  39. Anonymous

    Congratulations Nickel! Tax advantages notwithstanding, owning your home free and clear is like money in the bank. In fact it’ll BE money in the bank from the payments you won’t have to make.

    (7.5 years…that’s impressive by any standard!)

  40. Anonymous

    This is awesome. I’ve been getting more and more a desire to do the same thing. We are closing on our new house today and I’d love to get this thing knocked out in under 10 years!

    Thanks for the motivation to keep pluggin’ away!!

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