We Paid Off Our Mortgage: History and Commentary

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We paid off our mortgage. We contacted Provident Funding and requested the full amount due including any accrued interest, the money was sent via bank wire, and the loan is recorded as paid in full. As you might imagine, I spent many hours contemplating this move. In a somewhat anticlimactic fashion, the letter below warning us we had to pay the property taxes ourselves was the first physical acknowledgement of the occasion. I found it amusing that it was addressed “Dear Homeowner”, as I never really felt like I owned my home until now.

A bit of history. When we first bought our home, we looked at the common rules of thumb regarding house affordability and ended up paying 20% down with a initial mortgage less than 3 times our combined income. Indeed, we qualified for the mortgage on my wife’s documented income alone. We thought about getting a 15-year note but went for the flexibility of the 30-year note, while paying it down at the 15-year pace. Over subsequent refinances, our interest rate dropped from 6% to 3%. Even though this made our required monthly payment much less, we kept up the higher monthly payments which had us on the pace of a 10-year payoff.

While our mortgage payment felt “affordable” in terms of income, from the very beginning the monthly payments made up more than half of our household expenses. I was reminded monthly that if we paid off the house, our required expenses would be lower so much that one of us could stop working completely. In the end, the timing was accelerated due to birth of our new child and the personal decision against using daycare.

I already mentioned much of this in our October 2012 post about market timing and redirecting our money including any bonuses towards paying off the house. As usual, my timing stank and the S&P 500 is over 8% higher today than it was 6 months ago. Without a mortgage, our emergency fund (12 months of expenses) could also be cut in half, so the difference could also be put towards the mortgage. We had the money available in taxable accounts, and after hemming and hawing for a bit, we pulled the trigger. Final result: We paid off our house within 6 years.

Why pay off the mortgage early at all? You can see my reasoning for this decision in my posts Pay Off Mortgage Early? The Details and Rule of Thumb: When To Pay Off The Mortgage Early. I don’t necessarily recommend early mortgage payoff for everyone. It all depends.

What’s next? It’s been a learning experience. Our original plan circa 2005 was that I would be stay-at-home dad. But I realized that I like working more than I thought I would as opposed to taking care of kids full-time, while my wife discovered that she liked work less than she thought. We are making a transition to what I call pseudo semi-retirement. That may be a bit strong though; it’s the 2013 version of the traditional single-breadwinner arrangement, but instead we both work part-time and both look after the kiddos the rest of the time. As a couple, we’ll basically work the hours of a single full-time job. With no mortgage, we’ll still have enough income to cover the expenses and still save some for retirement – just less than before. I don’t consider it real semi-retirement as we won’t have to actually take any income from our current portfolio.

We’re definitely not retired, but I think it’s a big step in a optimized lifestyle. I look forward to seeing how this works out. If we like it, we’ll may stick with prolonged semi-retirement instead of going for early full-retirement.

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  1. Jonathan – congratulations! That is an incredibly accomplishment that obviously took a lot of hard work, planning, and dedication. I admire you for that.

    I think your rule of 20% down on a mortgage less than 3 times your combined annual income definitely helped you meet this goal. Too many people just look at the monthly payment or don’t even think about what they’re doing at all and we end up in the 2008 housing crisis.

    I noticed your investment portfolio has almost replaced your expenses as well. It will be interesting to follow your next course of action as you become financially independent in the next few years.

    I don’t think my location will be stable enough for the next 10 years to pay off a house/condo. I can imagine, though, that seeing your monthly expenses halved and knowing you won’t have to worry about a place to live with your family must be extremely liberating. Congratulations on your new found freedom from the monthly mortgage payment!

  2. It’s a great feeling of satisfaction no matter how you look at it.

    I was a big Provident supporter until last December when I took them up on their offer to refi rate and term… thought it would be a no-brainer since they had 8 years of my Provident mortgage history already… boy was I wrong!

    834 credit score, 40% loan to value and 21 years on the job was not good enough… couldn’t get the time of day from Christmas till after New Years and then 3 days after the rate lock expires they approve me except now the loan will cost $3,000 additional… told them what they could do.

    Went to my Credit Union and did the deal… decided on a 15 year because of the 2.75% rate and also paid down my mortgage 100k to get the payment where I wanted.

    Funny thing with Provident is they had my home value at 380k and not the 500k I said… Credit Union appraised it at 520K… I’m always conservative by nature.

    Enjoy your site!

  3. Nice! Congratulations! Even at 3%, the mortgage interest rate is higher than what safe money can earn. It also gives you flexibility. Enjoy!

  4. right on buddy!

  5. AWESOME!!! Can you just clarify, was the remaining mortgage after the 20% about 3x your income or was the total home price approximately 3x income?

  6. You are an inspiration to us all! I hope MMB is an integral part of your pseudo semi-retirement.

  7. baughman says

    Congrats! I hope that will be me in about 8 years.

    I love this statement: “But I realized that I like working more than I thought I would as opposed to taking care of kids full-time.”

    As a father of 4 (ages 6 and under), I can sympathize…big time! Going to work is so much easier than staying home with the kids.

  8. Jonathan – I’ve been a daily reader since you brought your house. I’ve always loved how the early mortgage payoff debate would come up every few months.

    Congratulations to you and Mrs. MMB on the planning and execution of this!

  9. Working part-time sounds ideal. One question: how do both manage to get health insurance with part-time employment?

  10. Total Congrats. Your opening statement said it best “as I never really felt like I owned my home until now”. There is no other feeling in this world, well maybe winning the $500Mil jackpot, that owing your home free and clear. I purchased a rental property outright and it felt (feels) amazing, the closing was 4minutes, income is INCOME. I rent in a big city, but I can only imagine what owning clear a primary residence will feel like. Opting out of the rate chasing game, no middle man. In my opinion, this is what smart money consumers should strive for. It use to be one of life’s goals, but now so many feel as if they’re leveraging the system and getting away with “cheap” money, while banks laugh with fat cigars. Keep this in mind J – that roof over your head is yours Forever with no one to judge what you do with it. Pay the prop tax to keep the roads in front of it paved, but other than that enjoy the fruit of your hard work.

  11. Congratulations. It does feel like a bit of an anti-climax, doesn’t it? At least it did for me, when I made the same move last summer.

  12. Congratulations, I know this was very important to you and it is quite an accomplishment. Also, congrats on making the changes to your work/life balance I know are also so important to you.

  13. Paid off the house five years ago and loving it! We both enjoy working full time and will continue that. (Well, we are teachers, so we get the semi- retirement thing while keeping the health insurance).

    Two kids starting college in the next couple years and are happy to say they can go wherever they want, debt-free. We also enjoy traveling, and feel good about using that mortgage money for something fun!

  14. Alexandria says


    The happiest parents I know generally both did the part-time thing. If we had it to do all over again, is definitely what we would have done, especially at the preschool age. Regardless, you obviously had a financial plan in place to be flexible and to do what works for you. What works for you may change, and you will still have that flexibility. Even more, with the mortgage paid off.

  15. I’m curious. Had you put all that energy into stocks the past 6 yeas, would you say you would come out better than you did now?

  16. Congratulations! I hope to payoff our mortgage (initially a no-interest, nothing down loan) in 10 years. Question: will you have a retro “mortgage burning” party? I really like the idea (it encourages others, it’s a reason to gather friends and neighbors, etc)

  17. Congratulations Jonathan!!! I hope that you blog quite a bit about your joint semi-retirement and how it goes.

  18. It’s a great feeling, isn’t it? Total freedom, no debt, beholden to no-one. Monthly expenses are lower, income requirements are lower, so more time to enjoy family, friends, and explore interests. In other words, living and enjoying life rather than just surviving. Congrats!

  19. Congrats. I am 12-36 months behind you.

    The range reflects a choice to move more towards equities since I just refi’d at a sub-inflation rate.

  20. wow that is great jonathan. only 29.5 years left for me lol.

  21. Congratulations!

    For us, after a couple years of trying to pay down the mortgage as much as possible and refinancing twice, we’re taking a break in 2013 to pay for our wedding and a few improvements to the house. Hope to follow your lead one day though.

  22. Congratulations, Jonathan! Did you have a mortgage note burning party yet? πŸ™‚

  23. Congratulations!
    The first thought that struck me was – did you benefit from your refinances? Not that you could have know at the time (although it sounds like you were planning for it for a while), as you ended up repaying in 6 years would you have been better off not refinancing and avoiding the fees? Normally there is a period after a re-finance before you make up the fees in interest savings, and I’m curious to know if you got there. As you seem very organized I’d guess that you still have the closing statements from your refinance(s) to run the calculation…
    I know the principals of sunk-costs etc etc, but as an exercise and something to consider for people planning an accelerated repayment timline, it might be interesting to lay it out.
    Part of this ‘mortgage review’ could be a summation of all the fees, interest and expenses that went to buying your house – what did it really cost?
    Thanks for your blog – always makes me think!

  24. Could not be happier for you, your wife and child! You are a very bright young man who has worked very hard to achieve this goal. You will never regret this as your children will benefit beyond anything you can imagine.
    I would like to personally thank you for your incredible blog that has benefited me many times since I was lucky enough to find it. Please keep it up so that the rest of us can hopefully reach that moment of “nirvana” as well.

  25. Daddy Pig says

    Congratulation Jonathan! You are where I want to be. The freedom that comes with having a paid for house should be awesome. Just don’t forget how that impacts your taxes next year without having mortgage interest to deduct (if you itemize).

  26. Daddy Pig,

    u pay $1 to save 30 cents, if any. How is that tax savings?

  27. @Spencer – Thanks! Yes, I think buying a home that is affordable “now”, and then continuing to pay it off aggressively as your household income rises over time is a good plan. Lower interest rates also helped, for once!

    @xmasy – Thanks!

    @Julie – The total house price was close to 3X income at the time, could have been a bit more or a bit less. The 80% mortgage left after 20% downpayment was definitely less than 3X.

    @baughman – I know, that kind of surprised me that looking after a single baby was so much more exhausting than working. I missed the mental stimulation of working as well. But mostly, I think the baby likes mom better πŸ˜‰

    @Scott – Thanks! It’s definitely been on my mind a lot recently.

  28. @Donald – Good question. For now, wife’s employer is still including health insurance for half-time and above workers. If Mrs. MMB drops below that, we’ll have to find it on the open market. We’ll see what the health insurance exchanges look like in 2014, or we might try to wiggle into a group plan using my small business status. More to come on this.

    @Mike – Thanks! I often wonder if I’ll ever have a mortgage again.

    @fern – Thanks! Yes and no. On one hand, you think, shouldn’t I get a party or a fruit basket or something at least? There really is nothing to mark the occasion. I’ll take the one less hand sucking money out of my checking account every month though! πŸ™‚

    @Andy – Thanks!

  29. @Joally – Sounds like a good life to me! πŸ™‚

    @Alexandria – Thanks! I agree on the flexibility thing, planning to far ahead is so difficult as we really didn’t know we’ll actually feel about different situations esp involving kids.

    @NM – I don’t know the exact number, but stocks would have probably been better if invested with buy-hold-rebalance and you leave out the downpayment that would have been smooshed in the crash.

    @Penny – No mortgage burning party. I’m sure most of our friends think we’re crazy already with our early-retirement aspirations, no need to add to that. πŸ™‚

    @Lynn – Thanks! My next step is definitely to figure out this semi-retirement thing, and also how to best live off your investments in part or in whole.

    @Dee – Thanks! Yes, live more, work less! (With a baby, still sleep less though….)

    @D – Thanks! Congrats to you as well.

    @mvp – Thanks! I’m sure it could be a lot less for you too, if you want it to be πŸ™‚

    @Dan – Thanks, and congrats on the wedding!

    @YS – Thanks! No mortgage-burning party, I think a nice retirement party might be nice one day though πŸ™‚

  30. was it hard to find part time work? I am an electrical engineer and I find that most companies do not allow employees to work part time. many times I have asked to work 4 day/week and have been turned down; ( I would gladly take the 20% pay cut for this)

  31. @Robert – Thanks! Good question. For each refinance, I calculated the breakeven points where the lower payments would outweight the upfront refi costs:


    For the very first mortgage, I pay extra points for a breakeven of 5 years, which ended up being a mistake because rates dropped so fast. (Hard to see in 2007 before the mortgage crisis.) The first refi, I think my breakeven point was 2 years. 2nd, I think it was 6 months. Finally, this last refi I actually made some money from the the transaction, so it was in essence a cash-out refi that still lowered my rate. Many people only choose to do “no cost” refinances that lower their rate with no upfront costs, just all the usual mortgage hassles like income documentation and such.

    So… I did benefit some but not that much since I paid them off so fast.

  32. Daddy Pig says


    I didn’t mention anything about tax savings. The point is that if you have a deduction that you have taken for years, then plan for increased tax after the deduction is gone. Be prepared.

  33. Buy & Hold Blog says


    Congrats. Your post timing couldn’t be any better. I’ve been contemplating paying off house as well in 2 years, more likely EOY 2014. It will be close to 8 years for me. The idea of no more mortgage bills sounds very compelling to me. Our goal is to put our kids to private schools using the mortgage payment we would have made otherwise.

    Once again congrats. Enjoy your pseudo retirement.

  34. @Mary – Thanks, and thanks for reading! I think our journey still has a ways to run before “nirvana”, so stay tuned. πŸ˜‰

    @Daddy Pig – Thanks, our mortgage taxes paid have been dropping every year so I think we should be okay with our withholdings but I will check.

    @skg – In the engineering world, I know of many companies that let you do the 80 hours in 2 weeks with every other Friday off, but I agree that part-time work is hard to come by. In my opinion, your primary options are to find consulting-type gigs, start your own business and work for yourself, or find a tele-commuting job and be very efficient with your time (do the expected work in less time).

    I do have friends in the fed/state government who are furloughed due to budget concerns and have been forced to 80% pay, they aren’t too happy about that although like you I would be. Good luck!

  35. Oops I had so many comments to moderate that I overlooked a few, sorry!

    @Kurt – I’m definitely not a huge fan of Provident, but they had the best rate at the time and it worked out. I was actually afraid as there are lots of reports of bungled payoffs with Provident, but I followed their directions to the letter and it all worked out fine.

    @Harry S – Thanks! I agree that the 3% in terms of fixed-income is a pretty good deal right now.

    @Billy S – Thanks! Yes, MMB will be definitely be part of it, I definitely have plans to improve it but need to put them into action.

  36. Congrats, we also paid off our home quickly ~8 years. One of the things that surprised me was that near the end the amount going to for the mortgage vs escrow was very little. So we are now saving about 80% of the last years mortgage payment monthly to cover insurance and taxes. That was a bit anticlimactic. However, last year when I got laid off, owning our home felt very nice. All we really had to pay for was living expenses, which can be cut very low with no mortgage πŸ™‚

  37. Congrats, Jonathan! Thanks for the great blog – I’ve been reading since 2005. Best of luck to you and your family with the pseudo semi-retirement!

  38. Giovanni says


    Would you mind sharing what salary both of you were making since you bought your house?

    My wife and I currently make $110k combined and want to know how realistic that would be for us.

    What is the minimal salary you think is needed to do what you did??


  39. You sir, are an inspiration. Really.

  40. Paying mortgage off is not always a good move. Depending on you tax bracket, the deductions are worth some implicit RoR. With deductions falli g, the home is one if few deductions left. And with taxes only going up, it is worth a lot more than it used to be. I would guess you will pay more in taxes in next assuming your income stays the same. Hope you did the math.

    Congrats none the less.

  41. Congrats! I’m still in the “cash is king” category and love the idea of having (in my case) two large mortgages our there as an inflation hedge. Something tells me interest rates won’t be this low for 30 years…

    That said, it is painful seeing that interest expense at the end of the year knowing I have the cash to pay it off. I can appreciate wanting that off the books.

    For me, at the end of the day, nobody will ever loan me hundreds of thousands of dollars at ~3% to 4% interest, so I’m trying to take advantage of it. I’d settle for breaking even and having the liquidity.

  42. I like how you tucked the semi-retirement news into the mortgage payoff post – congrats! Would love to learn more about how this is working out for you and the wife.

  43. Congrats, Jonathan! πŸ˜€

  44. Jonathan,

    I think these 2 moves (early pay-off and semi-retirement) are mistakes.
    You are in the principal-accumulation part of your life. In 10 years, who knows, you may not be able to work full-time, and be less employable, and even less desiring to work hard to get credibility/network you can later glide on.

    Congrats, but I think you are about 10 years ahead. And paying off the house…I think there are many ways to get at 5% return, where as you got 3% with this, on the same money.

    I’ve been reading this blog for years, rarely commenting…we live close by, same age, similar financial situations (but I am way ahead of you:-).

    Anyways, the your life – your choices…We just got our second baby…It’s 250K to college, and 250K through it. 2 kids – 1M. That alone is making me and wife continue pushing it full-time, full speed. For 10 more years.

    Good luck!

  45. MikeinWisconsin says



    As an Ivy League MBA grad, my professors would call your move foolish, what with the money being so cheap these days (hello, 3% interest rates). However, as an owner of three fully paid properties (including my primary residence) and no debts, I would call your move great. Nothing beats sleeping soundly every night knowing that you nothing to anyone!

  46. Thats excellent,..Congrats Jon !!

  47. Congrats on accomplishing your goal.

    I’m just the opposite. Telecommute for $100K. Get to spend my mornings with the kids before school. Work ultra-efficiently (0 commute, 0 day care cost) packing in 10 hours of code in 6 hours. Get to spend time with the kids at 4 again (while they are young) so precious.

    Our 600k 3.5% mortgage won’t be paid for 15 years. That’s exactly when we want it. I love the rate and like the hedge it provdes. We opted for the best public schools and the dream home over paying 40k a year for private.

  48. I think it is great. Throw conventional thinking out the window. Thank you for sharing this experience.

    With really considering your quality of life and priorities, and not being obsessed about consumption, congratulations. I wouldn’t call it semi-retirement, just living life not being a wage slave.

  49. Jonathan,

    Congrats! What an accomplishment. Do you think this fast mortgage payoff would have been possible if you didn’t have the income from your blog, and had a typical 8-5 job? I know it’s a sensitive subject, but it would make for an interesting post someday to discuss how your blog impacts your income.

  50. Congratulations! I am a regular reader of your blog. I have been following your blog for five years. And I have learned a lot of good things from you. Thank you for all your blog posts. You are a great inspiration Jonathan. Way to go!

  51. Truely enjoyed your blog. Cant help notice that you went from having 35% equity in your home in Nov 2011 to having paid off your mortgage in 2013. Im not sure what Im missing here, but I hope you one day share the real secret (probably not online savings accounts and no interest credit card ploys).

  52. @Mike – Congrats on your house payoff. I’m guessing you live in an area where they shift a lot of the tax burden onto property taxes.

    @Andrew – Thanks!

    @Giovanni – I will say that either of our individual salaries (up until this year) was higher than your combined salaries. But I would also bet that your house cost less than ours though, and is probably bigger! πŸ™‚ Your house cost matters just as much as income.

    @Charlie Schluting -Thanks!

    @Jf – Thanks. I always do the math πŸ™‚

    @Maury – Thanks! I think your plan sounds fine as well. The way I see it, nobody’s paying me 3% for 1,5, even 10 years right now, and people may be surprised how long low interest rates can last.

    @2million – Thanks, I’ll let you know after a while. Some days it’s really tough and neither of us think we can handle it.

    @Andrew – Thanks!

    @Andrey – Half a million per kid, how does the rest of the world do it?

    @MikeinWI – Thanks!

    @MM – Thanks!

  53. @Scott – Sounds like you have a good plan as well.

    @o2o – Thanks!

    @Smitty – If our income were less, I think that we still would have really tried hard to avoid daycare until age 5 if at all possible. Along those lines, I think we would have (1) bought a cheaper house and (2) I probably would still pay down as much as we can and then refi’d into a 30-year mortgage to improve cashflow while the kids were young and then started working full-time again when they were in school.

    @Akila – Thanks!

    @Nate – Well, a few things. I really haven’t updated that graphic in a timely manner over the last few years. I also tend to save up cash, and then pay down the mortgage in lump sums. The house was paid off more or less in even chunks over 6 years. The secret is dual 6-figure incomes, buying a house that was between 2x and 3x income, and severe aversion to debt. I don’t necessarily think this would be easily achievable for anyone as obviously our income are top 5% or higher, but as you can see from the comments many other people have also paid off their mortgage much earlier than the standard 30-year term. Thanks for reading!

  54. JP,

    I am not sure why you’d ask. Will you be raising your kids in Mongolia or Mali?
    If it’s neither, this might be a good subject for your future posts. Google the cost of raising children, to confirm what I said. Then check out UC tuition costs, let’s forgo the private ones for a second. Then check the same 18 years ago. That will give an idea of what the costs will be in 18 years, since normal inflation has nothing to do with education costs.
    Then consider if you are ok with a community college, putting your kids 250 in debt, or deciding to come back into the work force…..


  55. Congratulations to you and Mrs. MMB.

    As mentioned in the previous post, this is a brave move. But nobody can predict how good/bad it will work. Just like quiting engineering phd or starting a personal finance blog, you have the courage and idea to try alternative routes. Best luck to you.

  56. Jon,..for a house in general,..is there anyway to pay or adjust property tax ,..to be expense free. I live in a high property tax State,where in monthly property tax is like around 60% of monthly mortgage.

  57. Congratulations, Jonathan!

    Wow, this is no small feat!

  58. graham weedon says

    I was so excited for you when i saw the ‘PAID’ stamped on your Mortgage icon at the top of your page! Congratulations to you and your wife!

    Our personal goal is to be mortgage free in 8 years when our only child goes off to college. We’re on ‘year’ 13 of a 15yr mortgage but we’ve got 25% equity and nearly the balance in stocks and bonds. Even if we don’t make it i’ll feel better for having tried and come close as opposed to nothing gained from not trying.

    As i’m typing this, i can’t shake the sensation that your family ‘escaped’ and that we all wish you well on the other side, and that we hope to join you soon!

  59. @Andrey – Sorry for the late reply. My argument is quite simple. The average household only earn about 60k a year. How on earth are they going to get a million dollars to raise two kids? Numbers are a bit old, but here are some stats on the families whose kids got admitted to UC Berkeley:


    The median parental income increased to $88,800 for 2009-10 from $82,270 for the previous academic year, with increases in the upper and lower quartile groups as well. However, the number of admitted students from families with income of less than $30,000 increased slightly to 1, 582 from 1,554.

    If they can do it, why can’t someone making more money?

    @Yifan – Thanks for the supportive words. It is definitely scary to voluntarily give up income.

    @MM – Not that I know of, but perhaps you’ll feel better knowing that if you live in a high property tax state, your other taxes like state income taxes are likely lower to balance out.

    @OC Budget – Thanks!

    @graham weedon – Thanks! I don’t know if we escaped, but I think we’re living without regrets so that’s good. πŸ™‚

  60. Congrats on paying off your mortgage!

  61. davidmichael says

    Congratulations. It’s a wonderful feeling to have paid off the house mortgage.

    We have been retired for 20 years now. When I sold my business, flush with cash, we decided to build our dream house. We could have paid for it by cash like the previous one, but our egos marched right along with the suggestions of our architect. Long story short, it became such a money pit (3000 sq ft plus 900 sq.ft.garage) that we sold it ten years into our retirement. Sold everything and worked overseas for five years to recoup our funds. Now we have a moving house and enjoy exploring the American West with our motorhome. We are down to the RV, two kayaks, and two bicycles. So happy to be rid of all the stuff!

    So…in summary, yes! Pay off the house if for nothing else than “Peace of mind”. Especially as one nears retirement.

  62. I love reading stories like this because it keeps me motivated while we are paying off our own home. We are about 3 years away and I can’t wait to do the same. Maybe you can make more in the stock market but you can also lose your shirt so for us the security that a paid off house provides for the family is priceless. This feeling of security and low stress will eventually open up other opportunities since you are not worries about losing your home.

  63. Mrs. Frugalista says

    We paid off our home in three years. Yes…great income and lots of sacrifices paid off. We put all of the extra cash we had towards the principal, sold our rental property to our young adult son and used a good portion of our savings to pay off $243K and two car loans. Guess what? A month after we paid off our home, my husband lost his job of 16 years. Now, we can live off my income while my husband looks for a job. It was the best decision we made!

  64. Wow, inspiring story of the dream of achieving Financial Freedom and what a bit of financial sacrifice can get you in this life. Congrats on the payoff!

  65. Bapu Nagar says

    I know how it feels! We paid off our home in just three years after we bought in 1998. Our goal is also to retire early by the time I’m 55(5 yrs to go). 3 Kids – College is cost is outrageous and have been saving diligently. Planning to retire on 4% WR.

  66. Simple Guy says

    I have read articles that say that people who earn $500,000/year are no happier than people who earn $50,000/year and I have always had trouble understanding this, but when you think about mortgages and other bills, it begins to make sense. If you make $50,000 and buy an affordable home and stay in it, you’ll probably be kind of happy. If you get a raise at work and immediately jump into a more expensive house and repeat this a few times in your life, then I now see why you won’t be happier; you just keep extending expenses and complicating yourself. Just the same, refinancing your home to take out cash to buy expensive cars, jewelry, unnecessary consumer goods and other frivolous things, won’t make you any happier. You just become a slave to material possessions and get in a never-ending hamster wheel. You can run faster and work harder, but you never get anywhere.

    I’m 38 years old and bought a house 4 months ago for $835,000. Last week I finished paying it off. I saved big for this house and went in with over $400,000 down and a couple of days after buying it, I sold my previous home and cashed out $200,000 and immediately sent to pay down the debt, so I was immediately down to about a $235,000 balance (roughly). I do have a good income and I have been taking every penny after paying all basic living expenses and sending them to the bank. 99% of the people with my income own boats, maybe a Corvette and just live lives that are crazy (in my opinion).

    I could’ve instead bought a $3 million dollar home and kept a 30 year mortgage, but for what? To have higher taxes, higher utilities and more things to breakdown in the house? I prefer to live comfortable, have the house paid off and work part-time.

    People are so in control of their happiness (and happiness is what it’s all about, right?), but they usually make decisions that go against their long-term happiness, to instead indulge in immediate gratification. When you do buy that very expensive car or other unnecessary thing, you get excited about it for a month (if that) and after it just becomes the norm. Why not keep your “norm” simple and take all that extra cash and pay off your home and be free. If you have debt and do not love your job, but you cannot leave because you have to keep paying bills, then you are a slave. Why do this to yourself? Buckle down, work really hard for a while and pay down all debt, then enjoy life. Start enjoying life soon, not after you’re 70!

    What Jonathan Ping has done is the smartest move possible. I would bet he is in the “happy” group of people in this world and for this I congratulate him!

    Great article!

  67. Congrats! It has to feel good but….the S&P is up over 50% since you’ve paid off your mortgage over 4 years ago (sorry to play desk jockey quarterback :)).

    I’m currently trying to decided to sell some taxable equities to pay off our $350K mortgage at 2.25%. Its a 5/1 arm that resets in July. The markets at all time highs making me nervous, however, historical data says the “happy path” is to keep borrowing at a low rate and invest. I’ll probably just keep refinancing to a 30 year term until death as long as rates are below 4% and there is a mortgage interest tax deduction. Sure, there will be lows but in the long run this strategy (historically) wins every time over a 30 year period. thoughts?

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