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We’re Paying Off Our House in 4 Years: Progress Report


Yes, you read the title right. Instead of waiting the typical 30 years to pay off our house, my wife and I have decided to pay off our house in just 4 years! You might be asking yourself, “Why in the world would you pay off your house so fast when the interest rates are so low?” Well, even with our “small” loan of $70,875, we would have paid an extra $60,000 in interest over the course of 30 years, which means that we would have bought our house for about $140,000 (with the down-payment). We decided that we’d rather pay off the house ASAP and pay far less in interest.

The Plan

With our frugal lifestyle and our side projects, we decided that we could pay an additional $1,200 on top of our regular payment each month. We bought our house in August, 2011, and if we started making these extra payments in January, 2012, we could pay off our house in exactly 4 years.

So How Are We Doing?

Well, as luck would have it, things didn’t start off well. My wife made a job transition, which forced us to buy a second vehicle, so we were not able to make an extra payment in January or February. The first additional payment did not happen until the beginning of March. We made our second additional payment in April, but then we ran into a snag again.

Since my wife was driving our Jeep an average of 75 miles per day, our gas expense was outrageous. We decided to pool up all of our money and buy a more fuel-efficient car and then put the Jeep up for sale. Needless to say, there wasn’t enough money in our account for the extra $1,200 payment in May.

Thankfully, we just sold the Jeep and we’re ready to make a double payment in June! Since we missed those first two months in the year though, we’re looking at a pay off time-frame of 4 years and 2 months rather than just the 4 years. We’ll have to see what we can do to get this back on track in the near future.

Graph It

For you visual learners out there, here’s a graphical representation of our progress over the last 5 months and our future expectation for June.

Wow, based on this graph, it looks like we’re doing a pretty crappy job on paying off this house! Honestly though, I think we’re doing just fine. Sure, we missed the first couple of payments, but since then, we have been pretty solid (when you consider the double payment that’s coming in early June)! If we can keep this up through December, we’ll have our mortgage down to $53,000! Taking off almost $20,000 in the first year is a pretty impressive accomplishment! Let’s hope we can keep this up for 6 more months! 🙂

What you do you think about our plan to pay off our house in 4 years? Do you think we’re crazy? Or are you fighting this battle with us?



My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. Hey but at least you knocked off 20k. That is “impressive”

    • We haven’t knocked off $20k yet! But, we will by the end of December (if all goes to plan that is). 🙂

  2. Good job Derek. With that size loan (not too big), might as well pay it off if you have no plans on investing elsewhere for a greater return.

    I plan to pay off my rentals, as those are cash flow positive business. I don’t plan to pay off my primary and want to keep the max mortgage interest deduction so long as I’m earning my current income.

    • I actually invest 16% of my income elsewhere (just because I do understand the benefits of compound interest), but all of the rest of the cash is going toward paying off the house. And then it’s on to paying cash for rental properties!

  3. $60k over 30 years sounds like a lot of interest but compared to the money you would earn, its not! Remember your money invested is compounded where your mortgage is simple interest (and tax deductible). With all of the ideas and ventures you have in your head, I would think your cash would be better served elsewhere.

    With that said, your missed payments aren’t a big deal! Whether you send 1 extra payment a year or 6, you’re in a good spot.

    • Haha, there always has to be one doesn’t there…? Yes, over time it is possible that my investments will outperform the amount of savings that we’re experiencing by paying our house off early, BUT, there is also a great possibility that the investments lose money (especially in this uncertain economy). I’d rather take the sure win on this one.

  4. I think this is great! This is exactly what we plan to do once my student loans are knocked out.

    • Awesome! Good luck paying off the loans, and then good luck paying off the house. I know you can do it too!

  5. I think you’re doing an awesome job! How many people can say they will have their house paid off in 4-years?! And even if you have to stretch it out another year, 5 is rockin’ too. Good luck and keep up the great work!

    • Thanks! You’re right, even if we pay off the house in 5 years, it will still be an awesome accomplishment!

  6. I’m right there with you 🙂

    We’re aiming to have our mortgage paid off by this December or sooner!

    • That’ll be so awesome when you pay off your mortgage! I want to read an exact account of your feelings when you make that final payment!

  7. Good for you Derek. Regardless of what ‘the numbers’ might say about paying extra on a low-interest mortgage, I believe the feelings of freedom and flexibility you’ll experience when mortgage-free tip the scale in favor of the course you’re following.

    • For one, the mortgage is an automatic “increase in earnings” because we’ll never have to pay the debt (other investments are certainly no guarantee), and second, just the feeling of debt freedom will be amazing. Very few people experience that in their 20s, or even in their 40s for that matter.

  8. We did it — in 3 years because we took the last 22K and paid it out of our savings to be done with it. WAY back then, we did it by just adding 2 add’l principle payments a month, and when it got down to reasonable pay off we just did it! Our rate was 9.5% back then – so even more valuable to us to get rid of it for good. So I know you can do it!

    • Thanks for the encouragement Johannah! Glad to hear from you again too – you always have inspirational stories!

  9. I can’t imagine a better feeling than living in a place with no payment. We are on a 10-year note, but I hope to have that paid off in more like 7.

    • I can’t either. Good luck on paying off your house too!

  10. We’re in the battle with you! Keep up the good work and keep fighting to pay that mortgage off!

    • We will. Thanks!

  11. Good for you Derek! If that is what you want to do then go for it! I bet you have a good couple of months in the future and if you want to stick to your original goal take some of that extra money and throw it toward the mortgage for the money you have missed.

    I fight regularly whether or not I should pay my mortgage off early but I’m betting I can make a better return elsewhere. I bet some time in the next 29.5 years (the remaining length on my mortgage) a savings account or CD will pay better risk free interest than my 4.625% mortgage rate.

    • I bet you’re right. We might have some additional funds here in the future to add onto the other payments. I am a little worried about Christmas though…

  12. I think you are doing very good job. Why pay extra as interest, if you can pay of sooner?

    Keep up the good job. Hopefully it is just a begging and the next property will be just around the corner!

    • I do hope that we can pay off this house even sooner than 4 years (if my web income continues to do well), and then yes, bring on the investment properties! 🙂 I love the idea of passive income in my future.

  13. Great plan! Be sure to stick with it even when you miss a month. There is no better feeling than being debt free.

    • I do plan on sticking with it for sure! I can’t wait to make this double payment this month! 🙂

  14. Very inspiring Derek! After you’ve paid off your house, do you plan on getting a new one as an investment property? Or just enjoy the extra income?

    • It’s currently a toss-up. Originally, we figured that we’d rent out our paid off house and move into another one. If we don’t do that, then we’ll probably stay in our house and put the extra money toward a rental. Either way, I’m on the mission for some passive income!! 🙂

  15. Cool beans! Congrats on your progress!

    We were on track to pay off our house in 4 years and 10 months, but we decided to buy another home instead, lol. That’s pushing our current mortgage payoff date to the beginning of next year since we are using the last push payoff cash for a 20% downpayment instead…oh well, a 6 year payoff is nice too.

    • I’m sure you had your reasons. Just keep pushing to pay off that debt and you’ll be just fine!

  16. 30 years of tax deductions and lost opportunity cost on the money you are putting into a product with no guarantee of return on investment. Not to mention lost opportunity cost of the interest your money could have earned during that time as you leveraged the debt.

    Peace of mind is one thing, but the math is different.

    @funancials – I’m with you on this one 🙂 There’s always one, or two of us.

    • Investments don’t always go up you know… I have seen to many people lose their house in this down economy, so I’d rather just own it outright. I believe it’s the right thing to do as well.

      • There are plenty of guaranteed investments with adequate ROR. I was just being vague, I’m used to people thinking about it in Dave Ramsey terms, such as “invest the difference into 10% mutual funds!”

        • No problem. I do already invest 16% of my income and my wife invests 5% of hers. These extra house payments are on top of the investments.

  17. wow that is impressive discipline there. nice work

    • We’ll see how long it lasts! The wife and I aren’t in total agreement on this one anymore. It’s going to make the future payments pretty tough.

  18. So did you get that mortgage down to about $56.9k yet for the year?
    DW and I opted for a self-forced method of paying it off by the time I turn 62 or sooner. If it works according to the 15 year amortization our mortgage is on, I’ll be a few months before my 62nd birthday.
    It may not be the best choice financially, but we’re still of the desire to not have a mortgage when I reach “standard” retirement age.
    We did look and see if we could cut it down shorter and if we cut all items aside from necessities (i.e. cable, cell phones, etc.), we could do it in about 8-9 years. We just don’t was to be that psychotic. LOL

    • Yep. Currently we’re actually at $59.2k. We’re a little behind, but I have quite a stash of money going from my side gigs that I plan to throw at it after we pay the taxes, so we should either be caught up, or ahead.

      • Excellent, very glad to hear it for you and the misses!

  19. I need some input and advice. My husband and I had been working diligently for the last couple of years to pay off our mortgage, he putting extra money on it and me putting money into savings. Earlier this year he retired from what he had been doing for 38 years; right now he’s just enjoying retirement, so he doesn’t have extra to put on the mortgage on a retiree’s salary. We have property in the mountains, decided to sell it; we now have a firm buyer! I ‘thought’ our agreed to plan was to pay off the mortgage with the proceeds (we can do that and still end up with about $12,000 extra to put into savings). He’s now waffling, saying maybe we should put the entire thing into savings ‘so we have it, in case we want to buy something else’. I already have a chunk in savings for emergencies, and of course he has a stable income from retirement should I lose my job. My goal has been to be debt free. The amount of interest that were paying on the mortgage is almost negligible so its not like we’re getting much of a tax break. I can’t seem to come up with a sound financial reason to do one or the other, other than my gut telling me to GO DEBT FREE! This is the only thing we owe anything on. I make a good salary and will continue to work for at least another 5 years (he’s a bit older).

    I could use some advise on the right words other than my gut to convince him my way? HELP!!!

    • Hi Nancy. Yes, it is definitely challenging to not only get on the same wavelength as your spouse financially, but it’s also difficult to remain on that same wavelength as well! Your story is a case and point of that. Since your interest payments are fairly low on the house, there’s not much leverage in that argument. The main reason why I want to be completely mortgage free is because I don’t want to even give the bank the opportunity to tell me the property is theirs and I have no rights to it. Let’s say something terrible happens and either your or you husband rack up $500,000 in medical debt (it happens every day, even for those that have insurance – after all, there is often a cap on insurance payouts). The payments are much higher than you can afford and if your house is 90% paid off, but you stop making payments, the bank has every right to take it back without giving you a penny. It is still considered their asset unless you have paid for it 100%. That’s the reason why I’m shooting for owning my house free and clear. I want it to be MY house, and I’LL decide what to do with it if I get into a financial bind.

    • I’d like to second Derek’s suggestion of paying it off and having the deed free/clear in your name.

      Ask your husband (in a sarcastic way of course), if he’d just rather refinance to another 30 year mortgage because that’ll make the minimum payments even lower on the mortgage.

      Keep in mind that I’ve even flip-flopped my POV on our mortgage. While we have 13 years left on our mortgage (next month it’ll go down to 12 years & 11 months!), I’ve suggested the possibility to my wife of refinancing it to a 30 year and use the difference to fully fund a Roth IRA for each of us every year until retirement. My wife simply slaps me in the face, figuratively speaking, and reminds me that both of us want the house to be paid in full before I reach the “standard” minimum retirement age.

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