How We Paid Off Our Mortgage in 3.5 Years

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We paid off our mortgage in 3.5 years! It was difficult to do but we love to be completely debt free. I share how we paid off our mortgage so quickly.

Last month, my husband and I made the very last payment on our mortgage, which was our last step in becoming completely debt free. I’m not sure the reality of it has hit me yet. I still can’t believe we finally did it! When you set a long-term goal and work hard day in and day out, staying disciplined to reach it and then you actually do achieve it, It feels so incredibly satisfying. Here’s how we did it.

What We Paid For Our House


I’m going with full disclosure here. We bought our house three and a half years ago, and our mortgage was $93,000. I know that seems like a pretty small mortgage amount, but I assure you that our house is not a shack. We actually live in a very affordable area for housing in the southeast, and our home that we bought out of foreclosure is 1,500 square feet and worth about $130,000. We got a really great deal, and that is a huge part of how we got into this position today.

Live Below Your Means by Downsizing


Downsizing was the single most important thing we did to get us here. Our previous house was much larger and had a much higher mortgage payment, so when we began house hunting and stumbled across this diamond in the rough, it set us on the straight and narrow path to becoming mortgage free.

Realizing the potential for becoming completely debt free in a few short years was a very exciting and motivating feeling. It put things in perspective for us so that we could reorganize our finances to really work for us and what we wanted to do. Our goal was to not owe anything to a bank, and buying a smaller home helped simplify our lives and finances so much that I was even able to quit my job in the process to stay at home with my daughter and start freelancing.

Downsizing afforded me that opportunity.

We Threw All of Our Extra Money At It


Any extra money that came our way went towards paying down our mortgage. At one point, we even drained part of our emergency fund to pay down our mortgage.

As fun as it is to watch your savings account grow, we drew excitement from watching our mortgage balance drop.

We kept a copy of our mortgage statement on the refrigerator for a while to have a daily reminder of it when we were outside the house and tempted to shop. Every payday, we would balance the checkbook and then tally up our savings and checking accounts to compare it to the balance of our mortgage.

The day those two numbers finally matched was an exciting day, although I knew we couldn’t just deplete the entirety of our accounts to pay it off that same day. Still, it was an exciting realization that we were so close we could taste it.

What About Retirement?


There’s an endless debate about saving your extra money to invest elsewhere instead of paying down your mortgage. Believe me, I’m aware. Before you start telling me that I could’ve made 8.35% more by investing that money elsewhere instead, I’ll go ahead and assure you that we didn’t shun our retirement savings to pay off our house. Far from it, actually. We made sure to maintain healthy emergency, savings, and retirement accounts throughout the process of paying down our debt.

Maybe we could have made more money in the long run by investing through an online brokerage account but our dream of owning our home free and clear surpassed that of growing an investment that involves risk. There’s not risk involved in paying off your debt, and not everyone dreams of early retirement. You have to do what is right for you, not what other people think you should do.

We paid off our mortgage in 3.5 years! It was difficult to do but we love to be completely debt free. I share how we paid off our mortgage so quickly.

What Are We Going to Do Now?


That’s a great question, and one we haven’t quite figured out yet. Paying off our mortgage was a huge long-term goal for us, and having that common goal really helped push us towards it faster and faster. I really never would have thought we’d get there this quickly, and now that we’ve arrived, I don’t know what our next goal is going to be.

We aren’t going to blow all of our money on some grand vacation after working this hard, but we do need a new long-term goal so that we don’t fritter away all of our extra money. (I’ve already justified more than a few purchases with, “But we don’t have a mortgage payment anymore!” Not good.) Clearly we will continue padding our retirement accounts and saving more money elsewhere, but we haven’t decided exactly what to do with it yet. I guess that’s a good problem to have. 🙂

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What would you do with your extra money if you didn’t have a mortgage payment? Are you trying to pay off your mortgage early? Have you ever downsized your home and belongings?

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Robin McDaniel

Robin is a freelance writer who chronicles her financial missteps and victories on her blog