I recently closed on my house! The first part of my journey to home ownership is finished. Now I get to start the next journey: Setting up the new place and making mortgage payments. That got me thinking: Can I payoff a mortgage in 10 years? After playing around with amortization calculators, I discovered I could. Let’s see how I can do it.
Why I Want To Payoff A Mortgage In 10 Years
I turned 38 this year and if I spend the next 30 years paying off my mortgage, I will be 68. Frankly, I don’t want to be that old and just paying off my house. Finally, I don’t want to take 30 years to payoff a mortgage.
Second, I participate in the FIRE Lifestyle (Financial Independence, Retire Early). For the most part, I focus on the FI section because I do enjoy working. However, I am looking into retiring from working full-time for an employer and becoming self-employed. Being free of a mortgage would help me tremendously with that goal. I wouldn’t have to worry about making enough money to pay my mortgage (just the property tax and insurance).
If I spend the next 10 years paying off my mortgage, I will be 48. While that may seem so far away, time moves so fast for me that I don’t really think 10 years is such a long time now.
How I Will Payoff A Mortgage In 10 Years
To explain how I will payoff my mortgage in 10 years, I need to provide some numbers:
- Current Mortgage: $124,450
- Extra Payment Needed Monthly To Achieve This Goal: $600
- When I Will Start Extra Payments: Jan 2021
How did I come up with the extra payment needed monthly to payoff a mortgage in 10 years? Using an amortization calculator. After plugging in some figures and playing around with extra payment amounts, I determined paying an extra $600 a month would payoff my mortgage in 10 years.
Why did I choose Jan 2021 to start? I need to buy major appliances and complete some minor projects to be completed. Even though I have money in the bank to pay for all of this, I rather take the next 3 months to work on this slowly and use my paychecks instead of draining my savings. Finally, I need to see what the bills are like for my house since I’m moving from an apartment.
Do I Plan To Move In The Future?
I don’t plan to move from my house any time soon. I stayed in my apartment for 6 years, so I’m planning to stay in my house for at least 10 years.
Yes, I know things could change. I could get married and we move into a new place. Or I could get an employment opportunity out of state. The future is unknown. However, I’m not going to let that stop me from this plan.
Finally, I know some people will disagree with my plan because mortgage interest rates are low and I could take my extra money and put it into the stock market and make even more money! While those people are correct, personal finance is personal. And what works for them may not necessarily work for me. I rather pay off my debt than chase gains in the stock market.
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