Yes, definitely! and mark “principal only” on your check.

Chris, YES! You bring up a great point. Some mortgage companies have a pre-payment penalty. However, you don’t want to make future mortgage payments, you want to make Principle Only Payments. Great point!

Nice work Chris! 🙂

Every time I sent in a regular payment or an extra principal payment, I could see how many years and how much interest I was saving! It was extremely motivating!!

I have been reading some of the comments above. A few years into our second loan, we refinanced for an adjustable mortgage. They always say don’t do these, but the interest rate was 1.875% and the highest it could ever go was as high as our previous loan. I would print an amortization sheet out and send payments whenever I wanted to. I didn’t worry about bi-monthly, bi-weekly, etc. Then in another year, when the rates were adjusted, I would print another amorization. Even though the interest rate went up, our required payment went down, because we had paid so much off. We bought our house about 3-1/2 years before I got my good paying job and I paid the house off four years later. I just thought I would mention this since some had asked about bi-weekly, bi-monthly, etc. The most important thing is to be sure your mortgage company does NOT have a pre-payment penalty.

It is also about liquidity. As I said, it would be nice to pay off the house, but in an emergency (and life can bring those, even if you have the standard rainy day fund) even a HELOC will only provide so much of the equity of the house to the owner. With the deductibility of the debt the other associated costs (at least in my situation (I have a 3k mortgage (3.75% Loan), 800 goes to principal deduction, so 2200 of that amount is reduced 1650 real cost + 200 HOA fee. I could not get a 3BR house/apartment in my area for a 1850 real cost…..)) keep the cost lower than what else is available. You recommendation to pay down is good for some people (maybe even most, since it helps those without investing discipline develop a significant asset), but if you are actually turning around and investing the money you would have used to pay down (vs consuming it as most people seem to do).

It is a personal/comfort thing to keep my non-liquid assets to a marginal level (around 25%) of my overall net worth and thanks to the tax code and current interest rates that can be obtained for relatively low cost). Historically houses only appreciate at or around the inflation rate, so overall they are also the worst performing of any asset class that you could own and my personal taste for risk is fairly high (this topic is one of the lightning rods of personal finance, as there is a broad span of opinions on paying off early vs investing that capital (and a lot of that comes down to personal opinions on risk (like my decision to keep it at a lower percentage of my net worth))).

“Hi, my name is Brett and I paid off our $100k mortgage in ______ years”

Wow, good for you Brett (and you need to start practicing that line above). 🙂 Just thinking about the debt you have paid off in the last year and having a paid off mortgage in a few more years makes me smile from ear to ear! Congrats and thanks for sharing.

“Gifting” to the bank! Well said 🙂

Daniel and Jim!

Thanks for your comment, but I am going to have to say you’re wrong. Actually, my calculator is going to say you’re wrong and I am just agreeing with math. Here is why mortgage debt is not a “good debt” for you or anyone:

Let’s pretend you and I both own a $200k home at 5%. We both have the ability to pay it off – I choose to pay it off and you do not. What does this look like?

You get to keep your mortgage and send the bank $10,000 in interest payments (5% of $200k). At the end of the year, you get to avoid sending $2,500 to the Government because you get to deduct 25% (using 25% tax deduction) of the mortgage interest you paid. Result: You paid $10k to the bank to avoid sending $2,500 to the Government.

I on the other hand pay off the mortgage. Let’s say we are in the same tax bracket of 25%. Since I am not paying a mortgage, I am going to lose out one getting the $2,500 back from the Government, however I am also missing out on having to send $10k to the bank! Result: I DID NOT pay $10k to the bank, and instead paid $2,500 to the Government.

By keeping “good debt” you are saying you enjoy sending $10,000 to the bank so you can keep from sending $2,500 to the Government. How is this a good plan again?

If you have a mortgage, then you better take that deduction each year. However, don’t keep a mortgage if you don’t have to because some broke finacial person told you it is “good debt”. They obviously need a new calculator.

Lastly, you are very wise to be investing! I think a lot of people assume if I am telling you to pay off the mortgage that I don’t think you should invest. You need to be doing both. You need a combination of investing, paying off debt, and even spending on crap stuff too! Thanks for reading and thanks for the comments! 🙂