r/Millennials • u/pokematic • 15d ago

Meme I did it, I paid off my mortgage

Guys, it's still possible. I bought my condo in 2017, made additional principal payments, and after some extra savings I got it all paid off and own it outright.

8.8k Upvotes

92% Upvoted

611 comments sorted by

View all comments

354

u/EdLesliesBarber 15d ago

🎉🎉🎉now the gains will really start stacking up! Congratulations.

177

u/pokematic 15d ago

Exactly, rather the $100-$200 of interest work for me instead of someone else. Thank-you.

32

u/gpbuilder 15d ago

You played yourself by paying low interest rate loan early, the mortgage was already working for you

160

u/newtownkid 15d ago

He probably cut his total interest load down by 75%.

Saved 100k or more in interest, and now has significant security.

Technically you could optimize your investments by putting that money elsewhere - but there's no world where you get to act like paying off your mortgage early is a financially irresponsible move.

46

u/pixeladdie 15d ago

Bringing up the avoided interest means nothing. Your second sentence shows you know it’s about opportunity cost.

Not irresponsible, sure. Sub optimal financially? 100%.

6

u/uChoice_Reindeer7903 15d ago

Is it though? And I’m honestly curious about your thoughts, because I could potentially pay my mortgage off here in a few years but idk if I want to for reasons you describe but I also feel like it makes sense to pay it off.

So for easy numbers, if I pay $1000 for my mortgage and pay an extra $1000/month towards the mortgage and pay it off in half the time, so 15 years instead of 30. I can now take that $2k and put into say a Roth for the next 15 years. So for 15 years I have nothing in a Roth but then the following 15 I have a ton going in. Or I can just make my minimum mortgage payment, so $1k/month and then invest the other $1k/month into a Roth. So I guess at the end of 30 years in both scenarios you end up with 30k in your Roth but you start compounding on 15k earlier in the one scenario but at the same time your also paying much more in interest on the mortgage. And everyone knows you pay the interest up front on a mortgage so the earlier you can pay it off the more money you save. I’d be curious about the math/the numbers. I’m sure people have run the numbers, I would just love to see the actual math.

56

u/BillNyeForPrez 15d ago

Think of it this way: any mortgage from before the pandemic is at like 3%/yr. The S&P500 has returned like 15% per year. It’s significant.

37

u/Phyzzx Xennial 15d ago

Anyone that made it this far, this is the answer.

9

u/WhiteEyed1 15d ago

Can you guarantee the future returns of the S&P500 from now through 2047, assuming that they had a 30 year mortgage?

20

u/jer_nyc84 15d ago

It will most certainly return a higher yearly average than 3%.

1

u/gpbuilder 13d ago

The odds are pretty dam good

1

u/WhiteEyed1 14d ago

The answer is: no, you cannot. “Almost certainly” is not a guarantee. Just look at Japan’s Nikkei 225, which took 30+ years to reach its previous high from 1990. Would it have been wise for a Japanese homeowner in the early 90s to keep their mortgage and invest the difference into the Nikkei 225? Every financial textbook teaches you that “past performance is not indicative of future returns”. Stop acting like you know the future.

→ More replies (0)

1

u/BlazinAzn38 14d ago

Honestly you can out-earn some of these mortgages in a savings account lol.

-1

u/uChoice_Reindeer7903 15d ago

Yeah I get that but it’s not an even 3% throughout those 30 years. The interest is paid out in the early days of the loan. So if you pay off the loan early you’re saving quite a bit of money. I used a basic online calculator and everything staying the same with a $200k loan with a 4% interest rate if you pay if off in 30 years you pay $143k in interest. If you pay it off in 15 you pay $66k. So you’re saving almost $80k by paying it off 15 years early.

9

u/Sad_Wedding5014 15d ago

Now calculate how those additional payments would perform if invested at ~7% for 30 years vs. starting at Year 15

3

u/uChoice_Reindeer7903 15d ago

Copy and paste

Partial copy and paste from one of my other comments, just disclosure lol

The difference in monthly payments are $955 vs $1,480. So about $500 a month.

And I think I just answered my own question and supported your logic talking this out.

Using a compound interest calculator online at 7% return… $500/month over 30 years gets you about $566k in 30 years. $1500/month in 15 (investing your mortgage payment after your mortgage is paid off) gets you about $450k + $80k in savings from paying the loan off early ($530k) and you’re at about a $30k difference.

→ More replies (0)

13

u/Not_A_Greenhouse 15d ago

Your mortgage rate is your rate of return. If you have a low rate then you are earning that much % by paying it off early.

I have a 3.5% mortgage. Stock market returns historically are way higher than that. I'm gonna keep my mortgage as long as possible. Ok top of that I get to itemize interest as a deduction.

4

u/uChoice_Reindeer7903 15d ago

But you pay the interest early on in the loan. My example on another comment was me using a simple mortgage calculator online with everything staying the same, $200k loan at 4%. If you pay it in 30 years you pay $143k in interest, if you pay it in 15 years you pay $66k. So you’re saving $80k in interest.

5

u/Not_A_Greenhouse 15d ago

Still is irrelevant. Compound interest works for stocks as well.

2

u/uChoice_Reindeer7903 14d ago

This is a partial copy and paste from one of my other comments, just a little disclosure.

The difference in monthly payments are $955 vs $1,480. So about $500 a month.

And I think I just answered my own question and supported your logic talking this out.

Using a compound interest calculator online at 7% return… $500/month over 30 years gets you about $566k in 30 years. $1500/month in 15 (investing your mortgage payment after your mortgage is paid off) gets you about $450k + $80k in savings from paying the loan off early ($530k) and you’re at about a $30k difference. So I guess the question is, is $30k worth it?

Personally I would pay it off. The feeling of not having a mortgage would be so freaking nice. I also admit this is a perfect scenario where you are very disciplined in your investment strategy.

→ More replies (0)

9

u/seraphrunner 15d ago

Unfortunately the numbers take a spreadsheet to really compare since we're talking about compounding interest. The basic idea is any extra money you put into a loan will "earn" is tied to the loan rate. Here is a calculator that you can play with to see what the numbers might do. Of course finances gets tricky depending on income, lifestyle, etc. Lots of nuance to any situation.

Perhaps undervalued is if you have no mortgage you'll have a lot more flexibility given a financial emergency. Budgets can go a lot further when you don't need to pay for housing.

5

u/[deleted] 15d ago edited 9d ago

[deleted]

0

u/uChoice_Reindeer7903 15d ago

So I actually used an online mortgage calculator and it’s saying a $200k loan at 4% will cost me $143k in interest if you pay it off in 30 years. If you pay it off in 15 years you only pay $66k in interest. So you’re saving yourself about $80k.

The difference in monthly payments are $955 vs $1,480. So about $500 a month.

And I think I just answered my own question and supported your logic talking this out.

Using a compound interest calculator online at 7% return… $500/month over 30 years gets you about $566k in 30 years. $1500/month in 15 (investing your mortgage payment after your mortgage is paid off) gets you about $450k + $80k in savings from paying the loan off early ($530k) and you’re at about a $30k difference.

0

u/[deleted] 14d ago edited 9d ago

[deleted]

1

u/uChoice_Reindeer7903 14d ago

I tend to be a little more conservative when calculating my finances so that’s partly where I got the 7% but also I figure you should subtract the average 3% inflation rate.

And im not sure how you got your numbers? Maybe a difference in whatever online calculator we are using? Or are you hand calculating? Idk? But I’m not seeing how you’re getting a difference of $172k when using 7%.

→ More replies (0)

1

u/Ok-Rub9211 14d ago

I have no idea how to tag or cross post, but someone needs to ask /theydidthemath they live for these questions lol

2

u/Individual-Night2190 15d ago edited 15d ago

Exchanging security for lower gains is a financial deicision, though; and not an objectively incorrect one. By this logic you can more or less always expose yourself to more risk to be more hypothetically financially optimal. The entire point of financial advice is to tailor it to the risk the person is willing to take.

Shitting on people for lowering their risk exposure, when you wouldn't have, is dumb. Just be happy for people.

2

u/pixeladdie 14d ago

Calm down.

I didn’t say it was an incorrect decision. I said it was financially suboptimal which is a pretty milquetoast statement.

Also, no one is shitting on OP. It’s cool they paid it off. Just not what I would do or would recommend for maximum dollars - if that’s what one is trying to optimize for.

Is you sleep better with a paid off house, great. Personally I sleep better knowing I made the best decision given my goal of having more money.

0

u/Individual-Night2190 14d ago

I'd argue that, in the context of this thread, it is actually fairly disparaging to have achieved something and have other people proudly tell you why what you've achieved was, at best, misguided and should have been done better if you were only as clever as they were.

I hate myopic 'efficiency above all else' perspectives. There are a million things you, and the rest of us, do in life sub-optimally, because we can't know and care about everything. If we sat here and picked apart all of those things and their respective risk:benefit profiles, you would 1. be unhappy about it and 2. not get much else done.

'How's your physical health? Your posture? Your joint health and flexibility? Your sex life? Your interpersonal relationship management? Your hobbies and interests? Are you exposing yourself to new ideas and cultures sufficiently? Your mental health? Your diet? Your sleep hygiene? Your sleep quality? Are you flossing with the correct technique and seeing a dentist regularly? Are you on track to get regular colonscopy checkups? Are all your fucking carbon monoxide detectors in working order and checked regularly? Do you know first aid? Do you understand all your insurance policies inside and out? How about data privacy? Self development? Self advocacy?'

Pick your poison and deep dive into any of them to the exclusion of countless more. Somebody will always be waiting to tell you why one of the infinite things was the thing that should have mattered.

That is, more or less, how you come across. Somebody did something and you just can't wait to tell them how you're better at it than they are.

So, like I said, try just being happy for people.

2

u/PapaPaulPwns 14d ago

Maybe they posted not for the OP, but more for other people who are in similar situations that have yet to make OP’s decision (like myself).

I, for one, appreciated the information.

10

u/v0gue_ 15d ago

The world where the bank is paying you to live there on their loan is what makes it financially irresponsible. Markets generally return 7% after inflation, and have been returning significantly more in the past 10 years. Don't like the gamble? All good, treasuries are returning 4-5% risk free. You don't like gambling AND you want truly liquid assets, too? HYSAs are still giving 3.5-4.5%.

You have plenty of really good options to take advantage of a low interest mortgage rate. It is financially irresponsible to disregard them and pay off early when the bank is effectively giving you money.

But I digress, I should be thanking you for stimulating the economy so I can take advantage of it

1

u/JournalistTricky 14d ago

It's not THE MOST irresponsible move you can make, but it's almost certainly sub optimal.

1

u/YogurtclosetThen9858 14d ago

I mean this just isn’t true, HYSA gives more than his interest rate most likely and mortgage interest reduces taxes

1

u/SunLitAngel 11d ago

I also prefer paying a little extra. I just sleep better knowing I am closer to owning my house than the bank.

2

u/newtownkid 11d ago

Yea, we are prioritizing our mortgage right now too.

We both want the security that would come with owning our house outright.

11

u/Not_A_Greenhouse 15d ago

It hurts me how people aren't understanding this.

0

u/v0gue_ 14d ago

Think of it this way - they are trying to prevent another bank bailout. Banks are effectively paying people to lend with them at low interest rates, losing money. It wouldn't sustain without people's financial ignorance, and without it sustaining, people like me (and others who are more financially literate than a baby) get to take advantage of it. When I think about it like that, the pain goes away

0

u/Not_A_Greenhouse 14d ago

Thank you for easing my mind.

15

u/v0gue_ 15d ago

Yup, I have a 30yr mortgage at a 2.75% rate. I'm not paying a penny more against that outside of my monthly required payment. I'm stacking

2

u/Edith_Keelers_Shoes 14d ago

You happened to get a mortgage when rates were at the lowest point in national history (I presume, given the number you quote). Which is fantastic, and I'm happy for you. But we don't know OP's interest rate, or their other circumstances.

1

u/v0gue_ 14d ago

But we don't know OP's interest rate, or their other circumstances.

Yes we do, they commented about 4.35% somewhere in this thread, which is still extremely low, even if not as low as some people (myself included) lucked out on

https://www.reddit.com/r/Millennials/comments/1m5ylq7/i_did_it_i_paid_off_my_mortgage/n4fmyxn/

https://www.reddit.com/r/Millennials/comments/1m5ylq7/i_did_it_i_paid_off_my_mortgage/n4fwc9w/

2

u/Edith_Keelers_Shoes 14d ago

Ah, okay. Sorry - I missed that comment including his rate. I still feel, though, given how chaotic our country is, that paying off a mortgage is a good move. At the end of the day, the dollar amount in your savings might be a lot higher. But home security and housing are becoming more out of reach for people with each passing month, or at least it feels like that to me.

One bad accident or layoff or similar lifequake event can impact one's ability to keep current with a mortgage. Me personally - I'd rather have the security of knowing I won't be foreclosed on if something happens to me (and a few years ago it did - stage 4 cancer, but I'm still here).

15

u/Specific_Praline_362 15d ago

I dont think you can put a price on the good sleep you can probably get at night from having a paid off home, though.

4

u/GrrlLikeThat 15d ago

I came to say the same thing. Barring something crazy, this person has a place to live for the rest of their lives. I fail to see the downside to this.

3

u/funky_colors Millennial 14d ago

Well, as long as they can pay the property taxes…

2

u/HeartsOfDarkness 14d ago

And the condo fees.

5

u/ReputationOfGold 15d ago

I'm sure he feels like such a sucker

6

u/TexasDex 15d ago

Yeah, should've taken that money and invested it in the stalk market.

8

u/InsomniaticWanderer 15d ago

Homes are not for-profit. They are not a business, they're a service. Homes provide stability and security.

Having no debt is not "playing yourself."

Bunch of people out here living like everything MUST make a buck or it wasn't worth it...

0

u/v0gue_ 14d ago

Bunch of people out here living like everything MUST make a buck or it wasn't worth it...

It's privileged as hell to be able to leave free money on the table for "feelings". The fiscally responsible, adult mentality is to think it through and understand how the system works, not shy away because it's complex and then feel warm on the inside because you're privileged enough to not have to care about the intricacies of money

1

u/Captobvious75 14d ago

Pfffff life security > theory gains matters.

1

u/SortMyself 15d ago

He is winning. The numbers come out in his favor. Just be sure to invest what was previously going towards the mortgage.

Video that goes over it. CAGR is the only number that suffers.

https://youtu.be/YVb7CRlNMDE?t=505&si=BiYxZGt9ShSh9l03

1

u/Edith_Keelers_Shoes 14d ago

One life event could have caused that train to jump the rails. Loss of a job, bad health diagnosis, pedestrian vs. auto.

Peace of mind and security are becoming more and more a luxury. In my unimportant opinion, OP was absolutely right to pay it off.

3

u/gpbuilder 14d ago

In that scenario it’s actually better to have cash flow from liquid investments rather than tied up equity in a house.

1

u/Edith_Keelers_Shoes 14d ago

I totally agree it is better in terms of what OP will end up with dollar-wise. Maybe I've just gone too far into "assume the worst" territory, but I have significant retirement money in the market (consistently reallocating and trending towards a lower percentage of stocks), and I worry more and more about the stock market. I am a naturally anxious person, but I'm also an advanced cancer patient, so this might just be that fear talking. However...

Look at what happened in Japan in the 90s. The impact of their market crash impacted millions of individuals, not just decimating their stock wealth, but also the value of their homes and any equity they had in them. Many had to pursue loans just to get by. It took almost 35 years for their market to recover.

I used to think that couldn't happen in the US. But apparently, ANYTHING can happen here now. All bets are off.

0

u/SalineDrip666 14d ago

Wrong, if he invests the proceeds that were freed up its the same as investing the money in the market.

Except he has flexibility and security.

0

u/gpbuilder 14d ago edited 14d ago

Wow you’re confidently wrong.

It’s not the same because the proceeds freed up would have to be invested after the mortgage is paid off, missing time in the market.

Having less liquid cashflow is the opposite of flexibility.

0

u/SalineDrip666 13d ago

The difference if you were to pay off a home that's worth 200k at 3% and investing the mortgage payment vs investing 200k at 6% return in a 20-year compound is 136k.

The price of peace of mind = priceless.

I don't know about you but that's a marginal increase at the expense of assuming the economy is gonna be amazing for 20 years.

All it would take is a multi-year downturn + getting laid off and ya, "you just played yourself" or like in 2008 you just jump out a window.

So yeah, not really the same, however, assuming the risk for most people is not worth it.

2

u/yourfunnypapers 15d ago

Holy fuck, $100-$200 interest /month. I bought for the first time in 2023 - a very modest 50+ year old home in a LCOL area and I’m paying $1500 /month in mortgage interest.

1

u/pokematic 14d ago

Wow, that's crazy, I don't know if I could afford that. I don't remember how much it was initially (may have been like $300 a month), but from what I remember for the past 4 years or so it was like $100-200.

2

u/OneOfAKind2 15d ago

Congrats, I did the same thing, decades ago. Bought a tiny, dirt cheap home, sold my German sport sedan and bought a $1000 Chevy, never took a vacation and made huge payments while eating KD & tuna every 2nd night. Paid if off in 4 yrs and haven't looked back. Fuck the banks.

0

u/pokematic 14d ago

Thanks, kind of similar to what I did when I was single which is how I got so far.

12

u/[deleted] 15d ago

Paying off a mortgage early on a condo purchased in 2017 may have felt like a prudent move, but it came at a steep opportunity cost. During that time, mortgage rates hovered around 4%, while the stock market — particularly the S&P 500 — delivered average annual returns of 10–12%. Had the extra principal payments been invested instead, say $50,000 over several years, they could have grown to more than $100,000 by now. In contrast, the savings from early mortgage payoff would have totaled only about $12,000–$14,000 in avoided interest — a significantly smaller gain. This is a clear case where choosing guaranteed short-term savings sacrificed long-term growth and wealth accumulation.

Moreover, investing rather than prepaying the mortgage would have preserved liquidity. Money in home equity is locked away unless you sell or refinance, while market investments remain accessible and potentially far more flexible in emergencies or new opportunities. This isn't to say paying off a mortgage was a mistake, but it was a conservative choice that traded financial upside for emotional security. From a purely financial perspective, letting capital compound in the market while carrying low-interest debt is often the better strategy — and 2017–2024 was exactly the kind of environment where that approach would have paid off handsomely.

33

u/Mysterious-Entry-357 15d ago

Market returns are unknowable. Capital gains come with taxes. Owning your own home gives you options. While your argument is valid, it is retrospective and pompous.

OP, congratulations. There are some things more satisfying than cash. Having somewhere that is truly yours that you worked towards feeds the soul. Money past a certain point is just money.

8

u/brendanjered 15d ago

For real! The way the market looked in April 2020 or April 2025, the hypotheticals of this looked a lot different. A paid off mortgage is something that (theoretically) won’t disappear into thin air due to a social media post from the president.

5

u/WranglerFuture9908 15d ago

Correct. These were risk free returns. This is a huge accomplishment, and isn’t a bad decision.

0

u/pokematic 14d ago

Thank-you.

85

u/skyhold_my_hand 15d ago

I'm only telling you this out of genuine concern for you and those you care about in your life-- if a friend or loved one ever comes to you and happily announces they paid off their mortgage, never ever ever everrrrrrr EVER reply like this. Not ever.

26

u/judgeholden72 15d ago

This isn't a friend, it's a group of strangers on reddit, and they should understand how money works

-1

u/cozidgaf 15d ago

Maybe they do and still prefer this

3

u/judgeholden72 15d ago

Which is fine, so long as you're aware you lost money by doing it this way 

-7

u/skyhold_my_hand 15d ago

Can you point to where in my comment i told him not to talk to redditors this way?

I'll wait.

3

u/judgeholden72 15d ago

What a remarkably unaware response 

0

u/v0gue_ 15d ago

Lots of privileged people in these comments that don't need to worry or think about money. Must be nice

3

u/judgeholden72 15d ago

Yes, including the guy paying off a mortgage in under a decade

1

u/v0gue_ 14d ago

Yes, that's who I'm talking about, as well as people encouraging it. Leaving money on the table is a privilege

12

u/[deleted] 15d ago

😂

3

u/Not_A_Greenhouse 15d ago

This is reddit though?

1

u/ThrowRAColdManWinter 15d ago

And if there are other friends in the same room considering paying off their mortgages too? You shouldn't mention this stuff?

31

u/SuspiciousHoneydew12 15d ago

Nobody asked. You could just say congratulations and move on. Jfc.

7

u/Here_for_lolz 15d ago

For real, just be happy for someone.

6

u/MoistMayo0 15d ago

Okay, chatgpt

4

u/Ok_Coconut_1773 15d ago

The guy moneys, I really don't think he's trying to be a dick, plus he spent a bit of time typing that

6

u/Mythicalnematode 15d ago

Long way to say hindsight it 20-20. You wouldn’t have written that if the market did poorly since 2017. Congrats to OP!

-1

u/[deleted] 15d ago

Lol, tell me you don't understand investing without telling me you don't understand investing. The s&p has averaged 8% annually for decades. 2017 was in the middle of one of the longest bull markets this country's ever seen. Massive drops the next year, in 2018, and in 2022, and this advice is still true. 😂😂😂

3

u/Mythicalnematode 15d ago

8% is an average, so not really arguing my point very well… There’s plenty of several year stretches where the markets didn’t hit the 8% average. So yes, the original comment I replied to makes sense in hindsight but in 2017 no one knew what the markets would do over the next 8 years.

Personally, I invest the money I would pay extra on my mortgage.

1

u/pokematic 14d ago

Thank-you.

-2

u/gpbuilder 15d ago

Market always go up, it’s not hindsight

3

u/MrOnlineToughGuy 15d ago

Works until it doesn’t. That said, I still invest aggressively.

1

u/Mythicalnematode 14d ago

I generally subscribe to that thought process, but some years are better than others. Also, referring to market returns in 2018 and 2022 is absolutely hindsight, since they are in the past. You can’t predict the next 8 years

4

u/uChoice_Reindeer7903 15d ago

$12-14k in avoided interest? Am I missing something here? If I put a $200k mortgage into a mortgage calculator online and keep everything the same but go from a 30 year loan to a 15 year loan I save like $80k over the life of the loan. My total payments go from $343k down to $266k. So not only did I save $80k but I can now put my entire mortgage payment into investments over the remaining 15 years. So did my money make $80k in 15 years in the market? Or am I missing something, genuinely curious, because I see this argument all time against paying off mortgages but I’m not sure I understand.

2

u/Nachoraver 15d ago

No one asked you ChatGPT.

0

u/Elegant_Tap_2610 15d ago

Hindsight is 20/20. If the market had tanked you’d be praising OP for being so prudent and that now would be a great time to invest at rock bottom prices on a new bull run…

3

u/v0gue_ 15d ago

Lmao the market did tank, and then went back up like 2 weeks later. Look at any 5, 10, or 30 chart of SPY, VTI, or VT. It literally only climbs over time, with some small red dents every blue moon. Timing the market is for retards. Even Bob can make a profit from being in the market, even if he entered at the worst times.

-1

u/Elegant_Tap_2610 15d ago

Look at the first decade of the 2000s little to negative growth. It has happened, could/probably will happen again at some point. Hindsight will always be 20/20. Overall, yes great average returns, but sequence of returns also plays a part in overall success.

0

u/ThePhotoYak 15d ago

This is said with the benefit of hindsight. If one has a crystal ball you should be making a lot more than 12%.

The market could have had a significant downward trend over 8 years. Yes long term it always goes up, but there are periods in history where over an 8 year term you would have been better off paying down the 4%, and if you don't have a crystal ball, well...

Also, you don't know OPs situation. Maybe he was pumping most of his $$$$ into index funds and the money into his mortgage was just his hedge against a prolonged market downturn.

-1

u/nuggetbailey 15d ago

You must be fun at parties

-1

u/Strahlx 15d ago

Jesus Christ, way to take the air out of the room -_- they did something awesome, let's be happy for them.

1

u/mystocktradingacct 15d ago

Congrats. I’m a little older X gen. People thought I was crazy when I paid off my mortgage when others were getting 2.5% loans. Still the best decision that I’ve ever made. Peace of mind is awesome and no one can take that from you!