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Paying Down the Mortgage: My Successes and Failures


Against the advice of many of my friends, I have decided to pay down my mortgage aggressively this year. Some of you might be thinking, “Why in the world would you want to pay off your house when the interest rate is only 3.75%?” Well, there are many reasons: most of which are summed up in my article from last March: “Should You Pay Off Your Mortgage ASAP?“, but the main reasons are that (1) it is still a guaranteed gain since I will not have to pay that interest once the mortgage is gone, (2) my cash flow will skyrocket, (3) I can increase my investment portfolio, and (4) I will be completely debt free with very little risk in life (which equals extreme peace of mind).

So the next question is, how well am I doing at paying down the mortgage?….Well, let’s break this down a bit – starting with the failures:

My Mortgage Payoff Failures

After Christmas died down, I began to refocus on my goals of paying down that house of mine. Ideally, my mortgage would have been down to $40,000 at this point….but it wasn’t….not even close. It was at $55,000. This was going to make paying off the entire lump sum in 2014 incredibly difficult.

All my life, I considered $2,000 to be a pretty solid emergency fund…until just recently. Toward the end of last year, I asked some of my wealthy friends how much they keep in the bank for emergencies. The lowest amount I heard was $6,000, which is three times what I would typically keep in my bank account. This got me thinking, “perhaps I’m not saving enough in the event of an emergency?” Plus, with my bank account paying 3% interest on my savings up to $15,000, I was not maximizing my potential earnings here. So, I began to change my gameplan.

Instead of throwing every single penny I had toward my mortgage (which was my previous strategy – if you can call it that), I thought it would be much wiser to stock my bank account up to at least $15k before making any additional payments. This would provide me with a higher level of financial security, maximize my interest earnings, and would also allow me to invest and earn additional money (by flipping cars) that would then increase my mortgage payments in the [not so distant] future.

So yes, I have failed to pay down my mortgage aggressively at this point (it is still at $53k or so right now), but I will have plenty of cash to throw at it later in the year.

My Mortgage Payoff Successes

In early April, I will have nearly $15,000 stocked up in my emergency fund, and any additional money that I earn over that amount will go immediately toward the mortgage. So, starting in April I should be able to show you a chart with an extremely sharp drop in my mortgage loan amount!

Yesterday, as I considered this to be my plan of attack, I wondered how much I would have to pay each month in order to get the mortgage completely paid off by the end of 2014. Well, me being a nerd and all, I decided to graph out my past payments and the necessary future payments to get this done… Let’s just say I was not at all impressed with what the chart showed me…have a look for yourself:

mortgage payoff chart

My mortgage started off at about $71,000 in August of 2011. Over the course of 2.5 years, I have paid off nearly $20k. But, in the next 10 months I expect to pay off $53,000? What sort of dream world am I living in??? I mean, look at the graph! That’s ridiculous! I am going to have to put over $5,000 toward my loan each month in order to make this happen.

Well, if you know me at all, you know that I am 99% stubborn and extremely competitive. I still plan to get this done. 

How to Make This Possible

Since I do not quickly shy away from challenges like this one, I decided to figure out how this might be possible (instead of throwing in the towel as most would do at this point). Here are some positives coming in the future:

  1. I have an insurance reimbursement check coming for damages incurred to my house (from those dang ice dams…) ~ $3,000
  2. My work will reimburse me for an entire semester of school expenses in May ~ $3,500
  3. I expect to get a large tax refund ~ $3,000
  4. I am selling my Malibu, which should bring in over $6,500
  5. I will ride my bicycle for much of the summer, saving me hundreds in gasoline ~ $300
  6. My budget is allowing me to live quite inexpensively, and far below my regular monthly income

So let me have it, am I ridiculous? Or will you cheer me on?

Get Out of Debt Money Mortgage Payoff

AUTHOR Derek Sall

Derek has a Bachelor's degree in Finance and a Master's in Business. As a finance manager in the corporate world, he regularly identified and solved problems at the C-suite level. Today, Derek isn't interested in helping big companies. Instead, he's helping individuals win financially--one email, one article, one person at a time.


  1. Looking forward to reading through more. Excellent post.Much thanks again. Awesome.

    • Thanks DT. Do you plan to pay your mortgage off quick too?

  2. I think it’s a great idea to pay off your mortgage. Do you listen to Dave Ramsey? He always talks about how smart that is. Think of all the money you will say by not having to pay interest.

    • I do listen to Dave Ramsey! In fact, I am actually listening to his Financial Peace CD series in my car right now (for the 5th time or so)! 🙂 When I graduated with my Finance degree five years ago, I was too cool for Dave Ramsey, but now that I’ve been following his 7 step plan for almost 2 years I will never look back. I will be completely debt free soon and will have so much cash flow that building wealth will be easy!

  3. I am cheering you on!! I think you wld have achieved this goal had you not had large unexpected expense. You will be debt free in no time!! 🙂

    • Thanks Sis! Yeah, there were definitely a few bumps along the way that hindered my debt payoff. But, now I’m chugging on those tracks again and can’t wait to get completely debt free! 🙂

  4. Derek, I love reading your updates on paying down the mortgage because it motivates me to keep paying down mine. You’re MUCH further along than I am though, I still owe $148k so my plan is to pay it off in 4 years. Wish I could get it done faster and all extra money goes to it, but that’s the plan for now. I completely agree with the peace of mind of not having a mortgage (it’s the main reason I keep going with such large extra payments. Best of luck to you!

    • I’m glad Monica! It helps for me to hear comments from people such as yourself too! We all motivate each other. I will be sure to send another update next month.

  5. I can see why paying off your mortgage will make you feel more secure. I know it would make me feel secure.

    • Definitely. Not only will I feel more secure, but I will have a very large cash flow to invest. This should make retirement planning a breeze! I can’t wait to see where this takes me so I can take a bunch of my readers on a similar journey.

  6. I think I might have slowed the contributions to your emergency fund. You could split the difference, still increase your emergency fund (just not to the levels you are targeting) and then make up the shortfall pretty quickly once the mortgage is paid off.

    Either way I think you’ll be fine. Paying off your mortgage is a no-lose situation in my mind. Don’t let anybody tell you otherwise.

    • Oh well. At this point I am almost at the $15k and will start making large contributions to my mortgage as I receive the cash. I will feel secure and also motivated by my debt payoff. Thanks for the comment and the encouragement MB!

  7. You go, Derek. You’ll never regret it. It’s like pulling off a band aid – do it quick and never look back. Best of luck!!!!!!!!!!!!!!!!!!

    • Thanks Jim! Are you completely debt free? If you are, congrats! You are one of the few.

  8. Paying off your Mortgage early is great! The sooner you can get peace of mind the better! Way to go! Thanks for sharing the plan

    • You’re welcome Leonard. I am glad to share my plan with my readers, and I can’t wait to let them know how great a feeling it is to have my mortgage gone. Hopefully I can write a post about it in January 2015. 🙂

  9. After we took the Dave Ramsey class we paid off our 30 year mortgage in 2 years! We worked like dogs…….BEST THING WE EVER DID!!!! Zero debt = zero stress. We just relocated to Washington state (from Texas) and because of doing Dave Ramsey I get to retire at age 55 and life could not be sweeter!! You can do it Derek!! You are young……great life ahead of you, and living debt free is THE only way to go. People thought we were crazy when we did it, don’t listen to those nay sayers…..stick with your plan!!

    • Thank you so much for the awesome comment Toni! If I succeed with this mortgage payoff plan, I will be completely debt free before the age of 30. I bet I will be able to retire early as well! Can’t wait. Keep sending that encouragement my way – I might need it in a few months for sure. 😉

  10. Good for you! Fantastic job. I have only one thought in terms of possibly paying it off faster. Why not raise your dependents so you are taking home an additional $250/month? If you get roughly $3000/year back from your tax refund, why give the gov’t that money all year? Use the extra $250/month to pay even more down monthly. Reason I bring this up is that my wife and I just met with our accountant today. No refund for us. We actually owe every year and plan on keeping it that way. I rather get it back monthly.

    • I totally agree with you Brian. I typically always pay in, but last year I didn’t bring in as much money as I thought I would, so I overpaid in on accident. I will definitely be paying in less this calendar year. Thanks for the comment and the tips! 🙂

  11. I wish you all the best.

    I paid off my mortgage in 2 years– about $50,000 in the second year, which was not easy with my salary.

    I think you are off to a great start with your goals.

    I did not have $15,000 in the bank. I had about $3,000 to $5,000, but I always had money I could take out of a ROTH IRA penalty free if needed.

    If you have access to other funds in an emergency, maybe keep your EF lower?

    I got a real kick out of seeing my balance shrink every month. Sometimes I would send in 4 payments a month. It gave me the motivation to keep saving and finding new ways to earn, which for me included doing some banquet bartending and serving on the weekends.

    Sending good vibes your way. You can do it!

    • That’s awesome Mike! When I get to the end of the year, I might just throw $10k of that emergency fund toward the mortgage. Oh man I am getting excited about this. I think I might start planning my mortgage-free party! 🙂

  12. Fantastic Derek!
    I wish you the best of luck. I know from personal experience that once you have a family the bills seem to pile up more than go down. If I could only do the same, I wouldn’t know how to stop the excitement! 🙂

    • That’s really why I want to take care of the mortgage now. If I do happen to get married and have a family, I really want to have options open that would be best for me, my spouse, and our children. Being trapped in a job with a bunch of debt doesn’t sound like a great option. Thanks for the motivation Chris! I will keep everyone posted with my progress each month. Can’t wait!

  13. Derek,
    No – we don’t have our mortgage paid off – yet. Hoping to by October 2015. You’re highly competitive – beat me to the goal – ha! I’ll bet you do go ahead and throw that last $10K at your mortgage out of your ER fund. Hell, I know I would. I have been sorely tempted to pull $ out of our 401 account just to kill this mortgage. I know! I know how stupid it would be to do that (given the taxes, penalty and the fact that our mortgage interest rate is only at 3.25%) but I want that peace of mind so bad it makes me crazy. Do keep us posted on your progress. Everyone’s rooting for you – and the advice to up your deductions on your W-2 is good advice. You don’t want to be sending that $ to the gov’t – take it back and throw it at your mortgage.

    • That’s awesome that you have your target goal though Jim! I hear ya about putting your 401(k) money into your mortgage, but you’re right – that just wouldn’t be wise. Keep pressing on and stay in contact with me. We’ll hold each other accountable. 🙂

  14. Derek,
    I have no doubt that you will be as aggressive as possible in getting this done by the end of the year. You have outlined quite a head start with the funds that you are expecting and I look forward to following you as things progress.

    • Thanks for the encouragement JT! I will definitely be posting my progress each month (both to hold me accountable and for the enjoyment of my readers). 🙂

  15. I like it. Go for it – greater flexibility in the future is worth it, if you ask me. Plus, it’s not like you have a mortgage that is six figures or anything. Looking for homes in Boston has made me sad because the smallest, cheapest 2 BR condo’s are 4x the value of your mortgage when you started out.

    BTW, what program did you use to create that fancy chart? I like it!

    • Thanks for the encouragement Corey! Once this debt is gone it will be super easy to invest in future projects (such as real estate). As for the graph – I just did that in good ol Excel – version 2013. 🙂

  16. If you can swing it, get rid of that mortgage ASAP. Think about it: next year, NO mortgage payment. And as you have said, even though your mortgage interest is low, it’s still interest you’re paying.

    • That would be so awesome! Yeah, not only would it be great to get rid of those interest payments, but it would also be awesome to have that extra cash flow! I’m looking forward to paying off this mortgage by December. 🙂

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