Paying Off Our Mortgage in Five Years

We plan on paying off our mortgage in no more then five years (possibly a little more if you include school loans). This is not something that is encouraged or supported in our debt-driven culture. Even with hundred’s of debt relief books and websites out there, I’ve rarely, if ever, heard encouragement to pay off your mortgage as quickly as possible. People always seem to speak of a house as an ‘investment’ and ‘equity,’ rather then acknowledging that it is also debt.

We’ve decided to purchase a home and we’ve decided to be diligent in paying off our mortgage for that home as quickly as possible. Here are some of the reasons.

  • We don’t want to have any debt. For many, taking a loan is a necessary evil to purchase a home (and go to college), but that doesn’t mean we should accept it as good. We plan on paying off our home quickly, because until we do we will be paying interest to the bank and we will have tied much of our income into our loan.
  •  We want to serve as an example of fiscal responsibility. With so few examples and encouragement to pay off your mortgage, I think few people think it’s important or even worthwhile.  I think incredible good could be done with the financial resources we would have available if we did not need to constantly use our income to pay the interest on a house payment.
  • On the practical side of things, purchasing a home now will help us invest our ‘shelter’ money into paying off a mortgage, rather than paying for rent somewhere. We considered saving up the money for a home first, but realized that it might be wiser at this stage to take a loan and pay it off quickly than saving up to pay cash.

Again, this is just a few of the reasons. The goal was to address the financial and ‘mortgage’ side of things and try and explain how what we are choosing does not necessarily fit the ‘traditional’ way of home ownership.

This is also the stage where I would really really appreciate some feedback. Those who own homes might have insight’s I haven’t considered. Those who don’t are in a good place to challenge me on some of what I’ve shared. I think a deeper dialog on this topic would be really valuable. What are your thoughts?

9 thoughts on “Paying Off Our Mortgage in Five Years”

  1. Though the national and regional media scream that this is a horrible time to buy, it’s actually a very good time to buy. Housing prices have dipped somewhat and with sellers anxious, they are more likely to negotiate.

    My advice is to get your mortgage loan through someone local, first of all.. and preferably through a bank or a lender backed by a bank. I think it’s very admirable that your goal is to pay it off in five years. Besides plain lack of money, people don’t pay off mortgages because of the tax advantages of having one. But if I had a choice of a tax-write-off or owning a home outright, I’d pick the loan payoff any and every day! Good luck!

  2. I completely encourage and support your decision to *try* to knock out the mortgage in 5 years.

    The new home we just bought is under an 80/20 loan. We’re hoping to knock the 20$ part out in five years. If you can knock your whole mortgage out in five… more power to you!

    I would say to be reasonable and be comfortable in not knocking it out in five. If you pay it off in 10 (even 15) you’ll be doing better than the majority of America.

    Paying off the house is incredibly important; living like no one else today so you can live like no one else in five years (which, I know to you means giving away all that extra money) is a fun, exciting ride.

    I’ve actually considered starting to blog more openly about our finances… if we expect our churches to be open about their budgets, shouldn’t we?

  3. i still can’t help but feel like you are paying 3x’s the amount for a house when you take out a loan. i mean, when you consider the interest paid on a house you really are paying WAY more the the amount you feel like you are paying. right? so wouldn’t it make more sense to save and then pay it all off at once? sounds crazy, i know, but only b/c our culture tells us it is. if you saved $90,000 you would only pay that for the house without all of the interest. right? i’m no expert on this, but i do have a loan on my car. and i hate that i am paying several thousand more than i signed on for simply b/c i didn’t save and pay it off from the beginning. just a few thoughts for you.

  4. ariah… i would recommend that you look into acorn housing for your loan – if you qualify (either by income or location of home you are purchasing), you can get an interest rate lower than elsewhere on top of not needing to put money down (and no pmi).

    they do some really cool thinks with their housing stuff…

    as for paying of your mortgage in five years? very, very impressive, if it is possible.

    so wouldn’t it make more sense to save and then pay it all off at once?

    No… if you do this, you are still paying rent, probably for years, that you will never “recover.” But if you buy a house, you will almost assuredly (though not guaranteed) be able to recover every penny that you spent on the mortgage.

    Further… you only pay 3 times the price of the house if you actually hold on to the house for 30 years, which very few people do.

  5. Good for you! I am also trying to pay off our mortgage in 5 years, you are right that many people rarely encourage it. I have found blogging really helps me stay motivated. Good luck and I look forward to following your progress.

  6. Paying off a home in 5 years!? Possible!?
    YOU BET!! I think it is admirable at every level to get serious about leaving debt (all debt) in the rear view window.

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