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Why I’m So Glad I Have a Paid Off Mortgage

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I’m glad we have a paid off mortgage.  

I am so glad I have a paid off mortgage, I decided to say it nearly three times.

Since I’m not working, I don’t have any money coming in (except unemployment for a while).  I don’t have money going to retirement savings.  I don’t have money going to my health savings account or my son’s 529 education savings plan.

We’re as focused on frugality as ever, because unemployment just covers our expenses.

Wow, I am glad for our paid off mortgage right now.  When I had money coming in from multiple jobs and the markets were doing better, there were definitely times that I had second thoughts.

Is a paid off mortgage “worth it”?

Was the amount of money that we saved by paying off our mortgage in about 2 years worth it compared to the gains I could have had?  

The numbers say… I have no idea.

Let me backup- I say “about 2 years” because, honestly, I can’t remember if we paid it off in one and a half years or two and a half years.  This really shows how focused we were on goals vs. tracking. I wanted to get it done.

At that point I wasn’t logging things with hope of sharing it with blog readers and I wasn’t competing with anyone.  All that mattered was getting it done.

Heck, I just started tracking the growth of my net worth this year!

I’m a bit surprised I didn’t keep better track!

Had I paid it off as the 15 year mortgage loan how much money could I have made by putting that into taxable investment accounts (hello VTSAX) during recent up years?  I’m not going to run any numbers right now for two reasons:

  1. I can’t remember what our mortgage rate was.  Yes, I could go look it up in old paperwork. It was pretty low, in part because it was a 15 year loan.  I also diligently shopped around. We even made the mortgage just in my name and dropped my husband because my credit score was so much better.  But, since I can’t remember what the rate was, it’s hard to run comparisons on money savings.
  2. I’m not so great at running these numbers and comparing how the market performed historically.  Maybe one of my cool twitter friends like @FatTailedHappy would like to run some numbers for me if I can collect all the data.

I am curious…

How much money we could have made had I invested it.  It begs the question, had I done that, and been in the same situation I am now, with a market downturn and no job, would I have had enough gains to pull the money out and pay off the mortgage now?  We’ve been in the house about 5 years. So, that would be about 10 years early payment.

Also, and of course this would all factor in, I paid more on my down payment than I took as a loan for the mortgage.

Some real numbers:

I’ve never went into these numbers, but, I’ll go ahead and do it now.  We paid $220,000 for our 20 acre property. I put $120,000 down and we mortgaged $100,000.  This is surely not any kind of norm. The price or the down payments.

I don’t do anything the normal way, it would seem.

So, if I had done things more traditionally, how could I have done in the market up until now?

But here’s the problem with comparing then and now:

At that point, I wasn’t really even investing!

I had been investing into my 401k, but that was it.  The rest I had been diligently saving to use as a down payment on a house.

I was saving in a high yield savings account at Ally Bank.  At the time though, I don’t think their high yield accounts we’re even making 1%.  It was 0.9% or something like that.

It’s not like I would have been putting the money into VTSAX or something at that point.  Hell, I only discovered that THIS year!

Hindsight is 20/20

I have some idea on what the better way to do things might have been.  

But, I need to be very honest with myself that I didn’t know then what I know now.  How well my money might have done, is not as well as my money likely would have done.

I’m not going to beat myself up for, maybe, not making the best choice.

What I accomplished and the choices I made on my own are nothing to laugh at.

I hope to remind everyone, we’re not perfect!

Just consider, the fact that you’re learning and trying.  Wherever you’re at on your journey, that sets you above average (well, I assume for the readership that is actually here, reading this post).

Some of us have great mentors.  Others have family support to start off ahead.  Some of us have geography or other factors in our favor.

Some of us are just bumbling along the best we can, trying to learn as much as we can along the way.

There are a lot of ideas out there.  Each “expert” says they have the best strategy and you might try many along the way.

I’m still learning and I’ll make more decisions I’m not sure were right.

I’m sure I’ll look back on choices I made at this point in my life and think, “wow, probably should have done that differently.”  And that’s probably a good thing! It will mean I’ve grown and learned even more.

I figure, if I’m sure I’ve made all the right choices, it probably means I haven’t learned anything as time goes on.

I’m still ecstatic we paid off our mortgage!

It is such a load of weight of my shoulders to not have to worry about that.

A rent or a mortgage is one of the biggest stressors when times get tight. Outside of food (and we can control costs on that, to an extent) it’s a HUGE fixed cost for most households.

While I’m on a very limited income from unemployment, or if I do have to start tapping my investment accounts for living expenses, that’s one huge line item I’m not concerned about.

What if I hadn’t paid it off?

Oh sure, I probably could have done some fumbling around and cashed out taxable accounts to pay our mortgage while I’m not working.

But I might have lost money, and there are extra taxes involved.

I’m a bit obsessive so I probably would have worried a lot and fixated on how much further it would set us back to cash out now, when the markets aren’t doing great, just to pay our mortgage.

Since I made the choice over 5 years ago to take the route I did, I can wonder, but I don’t obsess.  That’s really important for my mental health in an already stressful period of my life.

Paying off our mortgage has given me freedom.

While I’m working to find a new job (that I want) instead of feeling super stressed, I do feel some freedom.

I have the freedom to work on my personal development. It’s bought me some time to work on developing freelance incomes streams and passive income streams.

Really, I can’t quite explain how glad I am that I don’t have to worry about my mortgage payment.

That doesn’t mean I’m stress free.  Far from it. But at least I’m not having to consider a job delivering pizzas just to pay the bills… yet.

So, should you pay off your mortgage?

It’s still a personal choice, and I really can’t answer that for you.

I can say, things can change really quick.  Be it a major health problem, job loss, something many of us don’t think about, such as underemployment, things can change really quick.

For a take on how quickly things can change, check out a few of these posts from Chief Mom OfficerHer Husband almost died!  They had to enact their emergency plan.  

Having a paid off mortgage could make things much less stressful if you’re in full on crisis mode.  You might even think of paying of your mortgage as part of your emergency action plan. 

I suppose much if it depends on your risk tolerance.  If I was younger, not married, and didn’t have a child, I might be less concerned about it.

What do you think?  What are your plans?  Do they account for the worst?

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Regina is That Frugal Pharmacist. She’s a PharmD, mother to a son with cancer, breadwinning wife, personal finance enthusiast, artist, writer, and entrepreneur. Regina’s single-income household has been debt-free, including her home, since she was 28 years old.
Her money approach is “holistic financial health.” She encourages mindful spending, awareness of the non-monetary costs of choices, and aligning personal values with money habits. Regina sees a frugal lifestyle and mindset as an important part of environmental stewardship. As such she’s interested in ongoing efforts towards self-sufficiency and sustainability.

17 thoughts on “Why I’m So Glad I Have a Paid Off Mortgage”

  1. Did not realize you were mortgage free. I’m sure this is a huge stress relief especially with your current job situation. We paid off our mortgage in August and it’s as if the weight of the world was lifted off our shoulders. I totally agree with all of the points you made about paying it off vs investing!

    1. I think I mentioned it in my about me, but, I’m surprised it took me this long to mention it.

      Who knows, could be a good traffic driver now that I’m a bit more established since it took me so long to write it! ?

      Makes me wonder what other obvious personal finance stories I’m forgetting.

      A bluehost writeup is in order next I suppose.

      Congrats on the mortgage free club. I stand by it— maybe could have made some more lucrative decisions, but the stress reduction is priceless!

  2. One of the best feelings I have had financially was becoming debt free and that involved first taking care of a large student loan balance and then attacking my mortgage.

    I had a 30 yr 1st mortgage at 5.625% and a 15 yr 2nd mortgage I believe at 8% or so.

    I definitely feel that I left money on the table using the extra money to pay off the mortgage (ended up paying off the mortgage in 9.5 yrs) since we had a huge bull run but as you mentioned hindsight is 20/20.

    There is a lot of non monetary rewards and the big one is financial peace of mind. The fact that money coming into my house no longer is making someone else rich is comforting.

  3. Its amazing how great it feels to pay the mortgage off and be debt free. We got there about 2 years ago, and it was right about then that the curtains pulled back, and we could see the chance to retire early!

    The level of stress has dropped dramatically. I know the “numbers” don’t say to do it, but the mental relief is well worth the dollars that are “lost.”

    Pay it off!

    1. That’s a good point. Early retirement wasn’t really even on my mind until I paid off the house and then realized how little I might need to have coming in to make us comfortable monthly.

      That, or, considering that I could pursue other avenues of employment or things that were more interesting. It just really opened up the world of opportunity.

  4. Same here FP. The mortgage is in process of being paid off, despite the maths saying it’d be better. Why? piece of mind, security, and extra cash every month.

    Your large deposit is what we did. £80K on £210K, means good initial LTV. Not sure what the situation is in the states but in the UK you can overpay and build a reserve, so we’ve overpaid and are clear in 6 years.


    1. Thanks for stopping in!

      Congrats and I think it’s a great decision. Damn the math!

      I think the rules on what happens if you prepay or overpay really depend on who you get your loan through. In my case, I could prepay with no penalties and I think I was able to note if it was extra to my principle or just extra pay ahead payments. Can’t remember which I did.

    2. I used my early retirement bonus to pay off what little remained of my mortgage and auto loan. BEST FEELING EVER to be debt free. Now I can live on a pittance and pay regular expenses.

      I figured that the longer I can keep my retirement savings untouched, the better chance I’ll have of not outliving my money, and the guaranteed savings of interest not paid on that debt equaled or exceeded market returns in a good market.

  5. We paid our mortgage off almost five years ago at the ages of 33 and 32. It has been a huge blessing to us! My husband lost a great paying job two years ago and we were unemployed/underemployed for almost a year. But thanks to no mortgage and a nice savings acct I did not freak out. It could have been a really terrible situation. I say always pay off your mortgage if you can:)

    1. Hi Elizabeth, sorry it’s taken me so long to get to comments. I’m still undigging from the hole I went into when my son got sick.

      Back to you, KUDOS! That’s quite a feat for two at that age. And yes, loss of a job or a major medical scare can really bring to light why it can be a great thing to do. Under the best of life circumstances, may not be the BEST choice. But, as we both know, life rarely proceeds fully to plan.

  6. I’m contemplating with my wife regarding paying off our mortgage now that we’re almost done with our student loans. It all boils down to stress free and a feeling of accomplishment. I’m going to set a plan in motion to pay off my mortgage asap.

  7. Congratulations on having a paid off mortgage! We paid ours off several years ago, knowing we could probably do better investing. However, two years after we paid it off, our 7 year old was diagnosed with stage 4 cancer. Overnight, our lives were turned upside down. I moved with my daughter 8 hours from home to be near a children’s hospital that could treat her. We rented a furnished apartment in a large city, and it was not cheap. However, without a mortgage, we were fine financially. I pray no one ever goes through such a trying time, but having that mortgage paid off is something that I will never regret. We were able to focus on getting our little girl better.

    1. Wow Debbie,

      Your story sounds remarkably similar to mine. I hope you look around my blog a bit more.

      2 years ago my then 2 year was diagnosed with stage 4/metastatic (they don’t really stage his cancer the same) neuroblastoma. That’s what has occupied us the last two years. We also effectively moved.

      The paid off house has been a life line. I have barely worked, but we have managed, and amazingly, our net worth is up thanks to the markets. Search under family and cancer at the top of the site for more (direct) posts, though it’s a theme ongoing in most posts since then.

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