I’ve always felt … oddly grateful toward my mortgage.
I feel much better about making mortgage payments every two weeks than I ever did about paying rent. My mortgage is a means to an end: better health, quality of life, stability (and peace of mind). And one day it will be gone, gone, GONE.
But it does weigh on me sometimes.
I recently got my 6-monthly mortgage statement. Since buying my house in March I’ve paid off $6574 of principal. Sweet! But nearly half of that was extra repayments, which I made straight to principal. Eeesh.
Much as I want to throw everything at it, though, there are other things I want to do in life. Like modernise my 1960s kitchen, for starters, and invest regularly (outside of KiwiSaver, that is).
I’ve always been terrible with balance, and balancing my mortgage against other financial priorities is probably going to be an ongoing struggle.
I feel the same way about my debt. On the one hand, SO MUCH DEBT. On the other, eh I need a place to live anyway.
I kind of hated mine at first. I’d never had debt before and my parents had taught me that debt is terrible. I made a lot of really aggressive payments for the first 2.5 years. I’d still like to see it gone, but I have been a lot more balanced in the last two years and have made zero extra pre-payments. It felt a bit weird at first, but now I’m getting used to it.
I didn’t know this at the beginning, but once it got below a certain balance, I was so much less stressed out about my mortgage. It’s hard to know what that number will be until you get there.
When I first had to deal with a mortgage on my own I was quite anxious. But in 5 years I had amassed a good amount of equity through extra payments and refinancing to lower interest rates.
Now I’m back to having a mortgage again, and while I do have a low interest rate I also have much larger mortgage since I’m now in a more expensive market. So far I’ve only made two payments, and am not throwing anything extra towards the principle yet. I’ll get there eventually, though. If I do stay here into my retirement years (and that’s likely) I need to get the mortgage paid down faster. I don’t want to be paying a mortgage when I’m 70!
I’m the same way. I just rented out my primary residence and feel good that the tenant is paying down principal but it’s also another debt on my balance sheet. You’re killing it with those extra principal repayments. Congratulations!
I felt really conflicted about it until I read “How to Retire Early” by the Charltons. They used their house as part of their net worth, and it helped them reach their goal for early retirement. I like my house, but I don’t love my house. I don’t think I’d want to be here forever, so the mortgage is fine. I’m not in a hurry to pay it off. I used to think I wanted to own the house outright, but right now, I’m more concerned with liquid investments.
Who WOULDN’T use their house as part of their net worth? (Don’t you?) Mortgage is the debt, house is the asset!
Also, I don’t rad many FIRE blogs but I do believe they all have paid off houses, no? It’s a big part of the puzzle – everyone has to live somewhere and no housing costs in retirement is a big plus. (I hear US property taxes can be a killer, though)
Some people who plan on staying in their house forever feel that they should ignore property appreciation and not put their house in their net worth and just count their investments since they will never move and it doesn’t matter how it changes. I love my place, but I doubt I will stay here forever and when I move, then the mortgage has to be paid off somehow, hopefully with the equity and then I will take that equity towards a new place. It seems pretty silly to not count my property in my net worth to me.
You include your own house as your net worth.
However, if you plan to retire in your own house, you do not include that as part of your retirement asset. You simply take out the rent budget and replace with a house maintenance budget (hope it’s a much smaller one).
Some FIREer includes their own house as FIRE asset as they will sell their house to fund their FIRE. They likely to move to another smaller house or low cost of living area.
Congrats! Having your own house is such a big accomplishment! We’re planning to look for our own place by next year “hopefully”.
Nice job with the extra payments! Honestly, I’ve never wanted to be a homeowner because I enjoy the flexibility of renting. However, since moving in with my boyfriend, who owns a house, it’s interesting to think about the mortgage. Thankfully, it’s a small, cozy house that didn’t cost an arm and a leg, so splitting the mortgage is less than I was ever paying renting, and it feels nice to be contributing straight toward that. We eventually want to turn it into a rental (it’s very much a starter home), so I don’t feel too bad about it. That said, my name also isn’t on it, so that probably helps!
I’d say I have a love/hate relationship with our mortgage, but that wouldn’t be entirely true. I’ve never truly loved my mortgage, probably because I’m somewhat entitled in that regard and I’ve always looked at it as a means to an end rather than a luxury that not everyone has the ability to attain. I should probably have more appreciation for it.
We are somewhat limited in our prepayment options on our current mortgage, so I’m only allowed to prepay a maximum of 10% of the most recent renewal balance every year. I’ve put the full 10% down on it the last two years, and I intend to do the same again this year. Having that limitation does help somewhat to force a little bit of balance on me, otherwise I might be inclined to dive head first into debt reduction mode, slashing things that shouldn’t be slashed along the way.
I view my mortgage as a challenge. My procrastinator tendencies usually make me focus on the latest-possible due date. However, it feels like I’m doing something rebellious by planning to pay it off early. Normal people don’t do that. They just make their monthly payment and accept that it will be part of their life for decades to come. I get satisfaction from being a rebel, doing the unexpected.
Good for you for making those extra prepayments! I had a big celebration when I paid off my mortgage ten years ago and was debt free. Then I moved five years ago and bought a more expensive house which required another mortgage. We have paid that one off now too. It is a great feeling.
I kind of feel that way about most of the debt we have had. Part of me is thankful I had the option to take on the debt because I couldn’t pay cash at that time. Like the medical debt I had. There is no way I could have paid cash, so I am happy I could take on the debt. Or my husbands student loans. We did pay cash for our home, but we took out small mortgages on our rentals. We didn’t have the money to pay 100% cash for those, so I am happy we could borrow money. But I am also SO happy when they have been paid off one by one. First medical debt, then student loans, and soon one of the rental properties. =)
It’s going to be weird when it’s gone, but there will still be property taxes an insurance to keep me remembering that housing isn’t really free.
I’m currently a renter and have never considered buying because of prices and inconvenience. I do like the fact that I don’t have to worry about maintenance or property tax or speaking to lawyers and all that. There’s a ton that goes into home ownership. That said, I can definitely see your point of view too. It’s nice to think that your hard earned money is a lot going to something. You get to build equity every month. And there’s a certain feeling of pride that comes along with home ownership. Nice post!
I definitely feel like you–that a lot of times I actually feel good writing the check for my mortgage. However, as you said, when you see how relatively little goes toward the principal in the beginning years, it makes it a bit harder to take sometimes. But I do love knowing that I’m not throwing money away on rent.
I’m grateful for my mortgage for similar reasons. It feels good knowing that I won’t have to “rent” until the day I die and that eventually it will be paid off.
Yes – looking at it as a whole is awful. All those payments stacked up and eventually (and very gradually) paying down the principle is a hard pill to swallow. But there is light at the end of the tunnel. It does get better.
When I had a mortgage I never looked at the payoff timeline. It was much too daunting! Instead I looked at the relative rental rates in my area and thanked my lucky stars I was investing my money into my own place and not someone else’s. Just that simple shift helped to alleviate my mortgage stress.
Thanks again for popping by. I’m going to stick around to read some more! 🙂
Feels the same way. I have to love my mortgage to keep on paying it without fail.
I was so grateful when I bought my house with a mortgage. But quickly came to despise the monthly payments. This brought me to the realization that I needed to figure out how to pay this mortgage off as quickly as possible. Through hard work and determination I was able to pay it off in 7.5 years and now that I’m mortgage and debt free it was the best thing that I did. Keep up the hard work!!!
As stated in the first post “I need somewhere to live,” so I take it as inevitable. I want to pay as soon as possible. Although live without totally debts very difficult.
Good that you do extra payments. The faster it’s settled the better!
Do New Zealanders get any kind of tax advantage from their mortgages?
Whatever: think of it as a way to leverage money to improve your standard of living.
How have you made out in those earthquakes. A dam broke? Yipe! Are you OK?
I wouldn’t have it any other way, but can’t help having occasional downer moments. And then I think about the alternative, and that helps.
Perfectly fine, friends and family fine thankfully, and caused me to go check on my insurance coverage…
This year I started making extra payments towards principal. I wasn’t sure I really wanted to at first, but I don’t regret the extra payments at all. It’s hard to tackle a large amount, but every piece we chip away, the closer we get to our goal. We just gotta hang in there!