Anyone regret paying off mortgage early?

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Adenovir
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Re: anyone regret paying off mortgage early

Post by Adenovir »

mrsgoldilocks wrote: Mon Jun 07, 2021 9:29 pm Currently, I have a mortgage of 30 years at 2.5%. Since the beginning (which is Oct 2020), I have been paying extra so that I will pay off the mortgage in 15 years. And I'm also thinking to have early retirement around that time as well.

However, I'm always thinking if this is the right decision. Given that if I invest the extra payment monthly with 80/20 over stock/bond and my balance at the end of the 15 years, according to simulation, it's almost 100% chance to be able to cover my ending balance of my mortgage even after factoring in capital gain tax.

I understand that this is totally a piece of mind and personal preference thing; and for everyone who had paid off mortgage ahead of schedule, do you regret not investing your extra payment?

I really hate myself always going back to revisit my decision. I just wonder if others' personal experience can help me settle the issue.
No regrets. We paid off our mortgage when we "downsized" in 2018 for three reasons.
1. We didn't want the pain and hassle of getting a mortgage.
2. We didn't want a mortgage payment
3. We considered the equity in the house like a bond equivalent and reduced the bond allocation in our investments accordingly which maintained our exposure to stocks.
"Investing is simple, but not easy" - Warren Buffett
coachd50
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Re: anyone regret paying off mortgage early

Post by coachd50 »

bg5 wrote: Thu Jun 10, 2021 8:59 am
topper1296 wrote: Thu Jun 10, 2021 8:52 am I paid mine off early and just enjoyed my 3rd month with no mortgage payment with zero regrets. I could get laid off tomorrow (I've been laid off 3 times in my career) and would have a lot less stress by not having a mortgage payment hanging over my head. I don't care what the math says...you can't put a price on that.

Totally agree and people continue to just look at the numbers and not factor in RISK. Nothing wrong with debt but make no mistake about it that debt is RISK and things can change quickly in ones life.
I agree, but to play devil's advocate, some people continue to just look at the risk, and not look at the numbers. They say "not having a mortgage over my head relieves stress" without recognizing that if they didn't pay down/pay off then they would likely have a pile of cash (presumably invested) as well.

I made my decision based on my interest rate being 4%. I don't regret paying down and paying off because I have a more conservative nature, BUT I do think I regret the way I actually paid off the mortgage. I should have done more planning on that for tax purposes.
SethJane42
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Re: anyone regret paying off mortgage early

Post by SethJane42 »

bg5 wrote: Thu Jun 10, 2021 8:59 am
topper1296 wrote: Thu Jun 10, 2021 8:52 am I paid mine off early and just enjoyed my 3rd month with no mortgage payment with zero regrets. I could get laid off tomorrow (I've been laid off 3 times in my career) and would have a lot less stress by not having a mortgage payment hanging over my head. I don't care what the math says...you can't put a price on that.

Totally agree and people continue to just look at the numbers and not factor in RISK. Nothing wrong with debt but make no mistake about it that debt is RISK and things can change quickly in ones life.

Exactly. Debt is rife with risk, paying it off is not. Nothing but upward spiral when one is debt free. And here I sit on a piece of property that is mine as long as I pay the 1600 a year property tax.
Admiral
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Re: anyone regret paying off mortgage early

Post by Admiral »

topper1296 wrote: Thu Jun 10, 2021 8:52 am I paid mine off early and just enjoyed my 3rd month with no mortgage payment with zero regrets. I could get laid off tomorrow (I've been laid off 3 times in my career) and would have a lot less stress by not having a mortgage payment hanging over my head. I don't care what the math says...you can't put a price on that.
Again, not discounting your feelings. But this is a behavioral choice. If you have the money to pay off your mortgage but choose not to do so, then if you lose your job you spend your savings to pay the mortgage each month. Same result, you're just doling out the money in dribs and drabs not all at once.
'
The only thing different is the interest you're paying. That's the "price" as it were.
ttcbj
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Re: anyone regret paying off mortgage early

Post by ttcbj »

I didn't purchase my first house until 35 (around the time I got married and had my first child). I paid cash for it. It's a house we plan to stay in forever. Around that same time I also paid off my wife's medical school debt (I think it was about $40k).

In retrospect, both of these decisions yielded lower long-term wealth. But, 10 years later I have plenty of wealth and I don't regret it at all. I like the psychological benefits and simplicity.

One thing that has really surprised me in life is how much my attitude towards money has changed as my wealth has changed. Up until my early 30s, I was super frugal, almost grumpy about spending. My spending didn't increase even as my income did. After getting married and having kids, our spending increased dramatically, but it was still conservative, saving ~30% of pretax income, 50% of after tax income. Post-COVID, its really sunk in for me that we have 'enough' and life is short, and I am starting to spend a bit more (just bought a Porsche for $100K, and a $6K small catamaran, for example, very supportive of any spending my wife wants to do).

I think the truth is that paying off, or not paying off, your house isn't likely to make a huge difference in your wealth. It is all the other decisions you make (living below your means early in life, saving a lot, making career decisions that increase your income, not buying too much house, etc) that will really add up to significant wealth.

I think the decision to pay off a mortgage feels big because of its psychological impact, but in terms of building wealth you'd be better off focusing your efforts elsewhere, because its pretty marginal. If it were not so marginal, this thread would have a more decisive outcome, instead of many good points on each side.

EDIT: Perhaps a rule of thumb would also be, if paying off your mortgage would make you want to put your house in your financial calculations as an asset, because it would constitute a significant portion of your net worth, don't do it. If you can treat your house as just a place you live after paying it off, and your remaining liquid assets are still very sufficient for retirement etc, go for it if it pleases you, but it's not super important either way.
coachd50
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Re: anyone regret paying off mortgage early

Post by coachd50 »

ttcbj wrote: Thu Jun 10, 2021 9:33 am

I think the truth is that paying off, or not paying off, your house isn't likely to make a huge difference in your wealth. It is all the other decisions you make (living below your means early in life, saving a lot, making career decisions that increase your income, not buying too much house, etc) that will really add up to significant wealth.

I think the decision to pay off a mortgage feels big because of its psychological impact, but in terms of building wealth you'd be better off focusing your efforts elsewhere, because its pretty marginal. If it were not so marginal, this thread would have a more decisive outcome, instead of many good points on each side.

EDIT: Perhaps a rule of thumb would also be, if paying off your mortgage would make you want to put your house in your financial calculations as an asset, because it would constitute a significant portion of your net worth, don't do it. If you can treat your house as just a place you live after paying it off, and your remaining liquid assets are still very sufficient for retirement etc, go for it if it pleases you, but it's not super important either way.
This is as about as an insightful post as I have seen on this topic.
LeslieSmiley
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Re: anyone regret paying off mortgage early

Post by LeslieSmiley »

bg5 wrote: Thu Jun 10, 2021 8:59 am
topper1296 wrote: Thu Jun 10, 2021 8:52 am I paid mine off early and just enjoyed my 3rd month with no mortgage payment with zero regrets. I could get laid off tomorrow (I've been laid off 3 times in my career) and would have a lot less stress by not having a mortgage payment hanging over my head. I don't care what the math says...you can't put a price on that.

Totally agree and people continue to just look at the numbers and not factor in RISK. Nothing wrong with debt but make no mistake about it that debt is RISK and things can change quickly in ones life.
I can't and won't speak for the others. But personally I did factor in RISK. I strategically incurred debts with low interest rate so I can invest more capital in a MODERATE growth portfolio (70/30) with enough assets in fixed income. So when such RISK is manifested as market downturn, I have enough fixed income asset to continue to pay for my expenses while waiting for the market to recover. And at the end of it, I get an additional annual return of a few % and it's compound continuously. Of course if the market tanks and never recover in 30 years, then my strategy would not be prudent.

In other words, it's not all or nothing. You can do both, meaning factoring in risks while investing sensibly for better return not maximum but better.
Last edited by LeslieSmiley on Thu Jun 10, 2021 10:02 am, edited 3 times in total.
Admiral
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Re: anyone regret paying off mortgage early

Post by Admiral »

ttcbj wrote: Thu Jun 10, 2021 9:33 am I didn't purchase my first house until 35 (around the time I got married and had my first child). I paid cash for it. It's a house we plan to stay in forever. Around that same time I also paid off my wife's medical school debt (I think it was about $40k).

In retrospect, both of these decisions yielded lower long-term wealth. But, 10 years later I have plenty of wealth and I don't regret it at all. I like the psychological benefits and simplicity.

One thing that has really surprised me in life is how much my attitude towards money has changed as my wealth has changed. Up until my early 30s, I was super frugal, almost grumpy about spending. My spending didn't increase even as my income did. After getting married and having kids, our spending increased dramatically, but it was still conservative, saving ~30% of pretax income, 50% of after tax income. Post-COVID, its really sunk in for me that we have 'enough' and life is short, and I am starting to spend a bit more (just bought a Porsche for $100K, and a $6K small catamaran, for example, very supportive of any spending my wife wants to do).

I think the truth is that paying off, or not paying off, your house isn't likely to make a huge difference in your wealth. It is all the other decisions you make (living below your means early in life, saving a lot, making career decisions that increase your income, not buying too much house, etc) that will really add up to significant wealth.

I think the decision to pay off a mortgage feels big because of its psychological impact, but in terms of building wealth you'd be better off focusing your efforts elsewhere, because its pretty marginal. If it were not so marginal, this thread would have a more decisive outcome, instead of many good points on each side.

EDIT: Perhaps a rule of thumb would also be, if paying off your mortgage would make you want to put your house in your financial calculations as an asset, because it would constitute a significant portion of your net worth, don't do it. If you can treat your house as just a place you live after paying it off, and your remaining liquid assets are still very sufficient for retirement etc, go for it if it pleases you, but it's not super important either way.
Real estate is the single largest asset most Americans have by far.
Not Bogleheads, probably, but there it is. It’s quite significant IRL.
coachd50
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Re: anyone regret paying off mortgage early

Post by coachd50 »

Admiral wrote: Thu Jun 10, 2021 10:02 am
ttcbj wrote: Thu Jun 10, 2021 9:33 am I didn't purchase my first house until 35 (around the time I got married and had my first child). I paid cash for it. It's a house we plan to stay in forever. Around that same time I also paid off my wife's medical school debt (I think it was about $40k).

In retrospect, both of these decisions yielded lower long-term wealth. But, 10 years later I have plenty of wealth and I don't regret it at all. I like the psychological benefits and simplicity.

One thing that has really surprised me in life is how much my attitude towards money has changed as my wealth has changed. Up until my early 30s, I was super frugal, almost grumpy about spending. My spending didn't increase even as my income did. After getting married and having kids, our spending increased dramatically, but it was still conservative, saving ~30% of pretax income, 50% of after tax income. Post-COVID, its really sunk in for me that we have 'enough' and life is short, and I am starting to spend a bit more (just bought a Porsche for $100K, and a $6K small catamaran, for example, very supportive of any spending my wife wants to do).

I think the truth is that paying off, or not paying off, your house isn't likely to make a huge difference in your wealth. It is all the other decisions you make (living below your means early in life, saving a lot, making career decisions that increase your income, not buying too much house, etc) that will really add up to significant wealth.

I think the decision to pay off a mortgage feels big because of its psychological impact, but in terms of building wealth you'd be better off focusing your efforts elsewhere, because its pretty marginal. If it were not so marginal, this thread would have a more decisive outcome, instead of many good points on each side.

EDIT: Perhaps a rule of thumb would also be, if paying off your mortgage would make you want to put your house in your financial calculations as an asset, because it would constitute a significant portion of your net worth, don't do it. If you can treat your house as just a place you live after paying it off, and your remaining liquid assets are still very sufficient for retirement etc, go for it if it pleases you, but it's not super important either way.
Real estate is the single largest asset most Americans have by far.
Not Bogleheads, probably, but there it is. It’s quite significant IRL.
I don't really understand your post here. Yes, the home one lives in is probably the single largest asset that most Americans have, but that doesn't discredit the idea that "pay down/pay off early" vs pay as scheduled isn't really going to impact personal finance or wealth that much overall does it? Or am I missing something?
DoctorWu
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Re: anyone regret paying off mortgage early

Post by DoctorWu »

No regrets at all. Paid off in 17 years while funding Roths, 529B and non-IRA accounts. Slept well knowing it was ours and everything else was on track.
Hyperchicken
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Re: anyone regret paying off mortgage early

Post by Hyperchicken »

JoeRetire wrote: Thu Jun 10, 2021 6:03 am Never gamble. Only invest in guaranteed stocks.
Right. If a stock will not go up, don't invest in it.
LeslieSmiley
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Re: Anyone regret paying off mortgage early?

Post by LeslieSmiley »

Grt2bOutdoors wrote: Tue Mar 17, 2020 7:36 am
EdNorton wrote: Mon Mar 16, 2020 9:51 am
cherijoh wrote: Tue Aug 07, 2018 8:42 am
Hawaiishrimp wrote: Thu Jun 21, 2018 11:24 pm No, I will not pay off my mortgage early. I am at 2.5% fixed. I rather grow my portfolio than wasting the opportunity cost to build wealth. That "sense of security" is too costly.
Smart decision. I'm always amazed at the number of people who buy into the "guaranteed return" argument and then compare the return on a 2-year CD to their 30-yr mortgage. :oops:
That "guaranteed return" looks pretty good right now.
:sharebeer
Yup!
Not anymore with 8% DOW, 17% S&P and 44% Nasdaq return for 2020, plus my mortgage payment this month is lowered than last year and it will continue to get lower and lower due to inflation.

Since folks were coming back here 2 years later to post comments on the “guarantee return”, i feel that it’s a fair game to participate in the same spirit.
manuvns
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Re: Anyone regret paying off mortgage early?

Post by manuvns »

i plan to keep all my mortgages under 3.25% rates till i die , i guess i can beat that rate long term most years, when i got my first home the payment was 767$ now it's 540$ after 14 years . i am able to rent that house for over 1350$ .
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Re: Anyone regret paying off mortgage early?

Post by LadyGeek »

I merged mrsgoldilocks's thread into the ongoing discussion. The combined thread is in the Personal Finance (Not Investing) forum (mortgage).

(Thanks to the member who reported the post and provided a link to this thread.)
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michaeljc70
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Re: Anyone regret paying off mortgage early?

Post by michaeljc70 »

ThePrince wrote: Tue Aug 07, 2018 8:09 pm
acegolfer wrote: Tue Aug 07, 2018 8:02 am
wolf359 wrote: Wed Jun 13, 2018 5:32 am This thread started in 2012. I wonder if anybody who responded back then now regrets having put all that money into their home equity instead of having that several hundred thousand dollars invested into the stock market at the beginning of a multi year bull run?

The returns in the market have greatly exceeded the 3-4% that they saved in interest.
I'm one of them and will answer honestly. Starting 2012, I aggressively made extra payments and paid mortgage off fully ($200k) in 2013. TBH, I regret now (2018) for the reasons you stated.

If a similar financial option were to given today (= I can borrow $200k at 3-4% so that I can invest in TSM), I'd still prefer no debt because I'm more risk averse than the market. Who knows I may regret again in 5 yrs.

If one won’t secure a new mortgage today and invest the proceeds in the stock market, I struggle to be convinced that one truly regretted paying off the mortgage.
Some people are unable to get a mortgage for various reasons (early retiree, unemployed, income dropped and don't qualify anymore, self employed now, etc.)
Admiral
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Re: anyone regret paying off mortgage early

Post by Admiral »

coachd50 wrote: Thu Jun 10, 2021 10:11 am
Admiral wrote: Thu Jun 10, 2021 10:02 am
ttcbj wrote: Thu Jun 10, 2021 9:33 am I didn't purchase my first house until 35 (around the time I got married and had my first child). I paid cash for it. It's a house we plan to stay in forever. Around that same time I also paid off my wife's medical school debt (I think it was about $40k).

In retrospect, both of these decisions yielded lower long-term wealth. But, 10 years later I have plenty of wealth and I don't regret it at all. I like the psychological benefits and simplicity.

One thing that has really surprised me in life is how much my attitude towards money has changed as my wealth has changed. Up until my early 30s, I was super frugal, almost grumpy about spending. My spending didn't increase even as my income did. After getting married and having kids, our spending increased dramatically, but it was still conservative, saving ~30% of pretax income, 50% of after tax income. Post-COVID, its really sunk in for me that we have 'enough' and life is short, and I am starting to spend a bit more (just bought a Porsche for $100K, and a $6K small catamaran, for example, very supportive of any spending my wife wants to do).

I think the truth is that paying off, or not paying off, your house isn't likely to make a huge difference in your wealth. It is all the other decisions you make (living below your means early in life, saving a lot, making career decisions that increase your income, not buying too much house, etc) that will really add up to significant wealth.

I think the decision to pay off a mortgage feels big because of its psychological impact, but in terms of building wealth you'd be better off focusing your efforts elsewhere, because its pretty marginal. If it were not so marginal, this thread would have a more decisive outcome, instead of many good points on each side.

EDIT: Perhaps a rule of thumb would also be, if paying off your mortgage would make you want to put your house in your financial calculations as an asset, because it would constitute a significant portion of your net worth, don't do it. If you can treat your house as just a place you live after paying it off, and your remaining liquid assets are still very sufficient for retirement etc, go for it if it pleases you, but it's not super important either way.
Real estate is the single largest asset most Americans have by far.
Not Bogleheads, probably, but there it is. It’s quite significant IRL.
I don't really understand your post here. Yes, the home one lives in is probably the single largest asset that most Americans have, but that doesn't discredit the idea that "pay down/pay off early" vs pay as scheduled isn't really going to impact personal finance or wealth that much overall does it? Or am I missing something?
This poster wrote that "your house isn't likely to make a huge difference in your wealth" as well as "if paying off your mortgage would make you want to put your house in your financial calculations as an asset, because it would constitute a significant portion of your net worth, don't do it."

I am simply pointing out the fact that the house IS, in fact, the majority of the average person's wealth. There are many ways to recapture this wealth, in particular via imputed rent or by selling, taking profit, and downsizing. In effect, homeownership is a very important aspect of wealth creation, esp b/c most academic research shows that those who rent for less than a mortgage costs tend not to invest the difference (Bogleheads aside).

I do agree that in the long run buying a bond at 1% and paying a 2% mortgage may not make a huge difference. But I do feel strongly that keeping a 2% mortgage and investing in a balanced portfolio instead of pre-paying is the best of both worlds: you get a cheap house payment AND the return given by the markets.
Last edited by Admiral on Thu Jun 10, 2021 12:18 pm, edited 1 time in total.
MikeG62
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Re: Anyone regret paying off mortgage early?

Post by MikeG62 »

Paid off early many years ago and zero regrets.
Real Knowledge Comes Only From Experience
Ron Ronnerson
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Re: Anyone regret paying off mortgage early?

Post by Ron Ronnerson »

It may not be for everyone, but we’re sort of taking the opposite approach to paying it off early. In 2010, at age 35, we got a 30-year mortgage at a rate of 5.25%. We restarted the 30-year clock in 2012 when we refinanced at 3.25%. Then we refinanced for 30 years again in 2020 at 2.875%. The most recent refi, for 30 years one more time, was earlier this year. The rate is now at 2.375% and we took out $150k in cash this time as well. All the refinances were no-cost. I don’t know if I’ll be able to refinance to another 30-year loan at a better rate but would do so happily if the chance came up.

The original purchase price on our home was $500k and we put down $15k, or 3%, but didn’t have to pay PMI. After 11.5 years, we owe $492k on the house – more than we did when we first bought our home.

This approach has worked out well so far. Due to the low mortgage payments, we’ve been able to invest the money over the years and my wife has been able to be a stay-at-home parent. Our net worth in 2010, when we bought the house, was $100k and it is $1.6M now. I’m a public-school teacher.

A couple of important factors to this approach for us include that we need to keep our AGI low in order to get some nice tax credits (worth over $20k this year) and I’m expecting a six-figure pension so having a mortgage into retirement is less of a concern than it may be to others (though I doubt we’ll continue to live in our current home during retirement).
Grt2bOutdoors
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Re: Anyone regret paying off mortgage early?

Post by Grt2bOutdoors »

LeslieSmiley wrote: Thu Jun 10, 2021 11:27 am
Grt2bOutdoors wrote: Tue Mar 17, 2020 7:36 am
EdNorton wrote: Mon Mar 16, 2020 9:51 am
cherijoh wrote: Tue Aug 07, 2018 8:42 am
Hawaiishrimp wrote: Thu Jun 21, 2018 11:24 pm No, I will not pay off my mortgage early. I am at 2.5% fixed. I rather grow my portfolio than wasting the opportunity cost to build wealth. That "sense of security" is too costly.
Smart decision. I'm always amazed at the number of people who buy into the "guaranteed return" argument and then compare the return on a 2-year CD to their 30-yr mortgage. :oops:
That "guaranteed return" looks pretty good right now.
:sharebeer
Yup!
Not anymore with 8% DOW, 17% S&P and 44% Nasdaq return for 2020, plus my mortgage payment this month is lowered than last year and it will continue to get lower and lower due to inflation.

Since folks were coming back here 2 years later to post comments on the “guarantee return”, i feel that it’s a fair game to participate in the same spirit.
Sure, pile on, it’s fun playing Monday morning quarterback isn’t it? Only your statement is one of comparing apples to oranges.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
LeslieSmiley
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Joined: Fri May 08, 2015 7:43 pm

Re: Anyone regret paying off mortgage early?

Post by LeslieSmiley »

Grt2bOutdoors wrote: Thu Jun 10, 2021 12:41 pm
LeslieSmiley wrote: Thu Jun 10, 2021 11:27 am
Grt2bOutdoors wrote: Tue Mar 17, 2020 7:36 am
EdNorton wrote: Mon Mar 16, 2020 9:51 am
cherijoh wrote: Tue Aug 07, 2018 8:42 am

Smart decision. I'm always amazed at the number of people who buy into the "guaranteed return" argument and then compare the return on a 2-year CD to their 30-yr mortgage. :oops:
That "guaranteed return" looks pretty good right now.
:sharebeer
Yup!
Not anymore with 8% DOW, 17% S&P and 44% Nasdaq return for 2020, plus my mortgage payment this month is lowered than last year and it will continue to get lower and lower due to inflation.

Since folks were coming back here 2 years later to post comments on the “guarantee return”, i feel that it’s a fair game to participate in the same spirit.
Sure, pile on, it’s fun playing Monday morning quarterback isn’t it? Only your statement is one of comparing apples to oranges.
Not really. Those folks including yourself came back here during the covid-19 market downturn which is two years after the previous post to pile on. So it's only fair that a comment is made post covid-19 with the market recovery and further growth with respect to the effect of such "guarantee return".
Grt2bOutdoors
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Re: Anyone regret paying off mortgage early?

Post by Grt2bOutdoors »

LeslieSmiley wrote: Thu Jun 10, 2021 12:49 pm
Grt2bOutdoors wrote: Thu Jun 10, 2021 12:41 pm
LeslieSmiley wrote: Thu Jun 10, 2021 11:27 am
Grt2bOutdoors wrote: Tue Mar 17, 2020 7:36 am
EdNorton wrote: Mon Mar 16, 2020 9:51 am

That "guaranteed return" looks pretty good right now.
:sharebeer
Yup!
Not anymore with 8% DOW, 17% S&P and 44% Nasdaq return for 2020, plus my mortgage payment this month is lowered than last year and it will continue to get lower and lower due to inflation.

Since folks were coming back here 2 years later to post comments on the “guarantee return”, i feel that it’s a fair game to participate in the same spirit.
Sure, pile on, it’s fun playing Monday morning quarterback isn’t it? Only your statement is one of comparing apples to oranges.
Not really. Those folks including yourself came back here during the covid-19 market downturn which is two years after the previous post to pile on. So it's only fair that a comment is made post covid-19 with the market recovery and further growth with respect to the effect of such "guarantee return".
You should take a closer look at your screen - the thread you are posting on is merged by the board moderator to the original thread I posted on. You are the one who’s making the comments post Covid, not I. You are the one who is piling on.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
LeslieSmiley
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Joined: Fri May 08, 2015 7:43 pm

Re: Anyone regret paying off mortgage early?

Post by LeslieSmiley »

Grt2bOutdoors wrote: Thu Jun 10, 2021 12:54 pm
LeslieSmiley wrote: Thu Jun 10, 2021 12:49 pm
Grt2bOutdoors wrote: Thu Jun 10, 2021 12:41 pm
LeslieSmiley wrote: Thu Jun 10, 2021 11:27 am
Grt2bOutdoors wrote: Tue Mar 17, 2020 7:36 am

Yup!
Not anymore with 8% DOW, 17% S&P and 44% Nasdaq return for 2020, plus my mortgage payment this month is lowered than last year and it will continue to get lower and lower due to inflation.

Since folks were coming back here 2 years later to post comments on the “guarantee return”, i feel that it’s a fair game to participate in the same spirit.
Sure, pile on, it’s fun playing Monday morning quarterback isn’t it? Only your statement is one of comparing apples to oranges.
Not really. Those folks including yourself came back here during the covid-19 market downturn which is two years after the previous post to pile on. So it's only fair that a comment is made post covid-19 with the market recovery and further growth with respect to the effect of such "guarantee return".
You should take a closer look at your screen - the thread you are posting on is merged by the board moderator to the original thread I posted on. You are the one who’s making the comments post Covid, not I. You are the one who is piling on.
I did take a look at my screen.

I know that i am posting on an older thread that’s been merged to a more current thread.

Yes i am the one who’s making the comments post covid.

But what i said is that, in the old thread, someone commented about “not paying off mortgage” worked for them as they felt that the “guaranteed return” was not worth it to them in 2018.

Then, during the COVID-19 market downturn in 2020 which is 2 years later, someone resurrected the thread and made a comment in the effect of the “guarantee return” sure looks good now at the time and you concurred.

So i feel it’s only fair for someone to participate by making a comment in regards to the “guarantee return” now because apparently, you along with another poster were making an assertion that such “guarantee return” was great because the market tanked. So what i am doing is no different than what you did, that is, making comment on such “guarantee return” is not so great when the market is up.
Grt2bOutdoors
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Re: Anyone regret paying off mortgage early?

Post by Grt2bOutdoors »

LeslieSmiley wrote: Thu Jun 10, 2021 1:11 pm
Grt2bOutdoors wrote: Thu Jun 10, 2021 12:54 pm
LeslieSmiley wrote: Thu Jun 10, 2021 12:49 pm
Grt2bOutdoors wrote: Thu Jun 10, 2021 12:41 pm
LeslieSmiley wrote: Thu Jun 10, 2021 11:27 am

Not anymore with 8% DOW, 17% S&P and 44% Nasdaq return for 2020, plus my mortgage payment this month is lowered than last year and it will continue to get lower and lower due to inflation.

Since folks were coming back here 2 years later to post comments on the “guarantee return”, i feel that it’s a fair game to participate in the same spirit.
Sure, pile on, it’s fun playing Monday morning quarterback isn’t it? Only your statement is one of comparing apples to oranges.
Not really. Those folks including yourself came back here during the covid-19 market downturn which is two years after the previous post to pile on. So it's only fair that a comment is made post covid-19 with the market recovery and further growth with respect to the effect of such "guarantee return".
You should take a closer look at your screen - the thread you are posting on is merged by the board moderator to the original thread I posted on. You are the one who’s making the comments post Covid, not I. You are the one who is piling on.
I did take a look at my screen.

I know that i am posting on an older thread that’s been merged to a more current thread.

Yes i am the one who’s making the comments post covid.

But what i said is that, in the old thread, someone commented about “not paying off mortgage” worked for them as they felt that the “guaranteed return” was not worth it to them in 2018.

Then, during the COVID-19 market downturn in 2020 which is 2 years later, someone resurrected the thread and made a comment in the effect of the “guarantee return” sure looks good now at the time and you concurred.

So i feel it’s only fair for someone to participate by making a comment in regards to the “guarantee return” now because apparently, you along with another poster were making an assertion that such “guarantee return” was great because the market tanked. So what i am doing is no different than what you did, that is, making comment on such “guarantee return” is not so great when the market is up.
To each their own. Have a nice day.
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PowderDay9
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Re: Anyone regret paying off mortgage early?

Post by PowderDay9 »

No regrets whatsoever. It was the right decision at the time to reduce leverage by taking low earning bonds and cash and paying off a higher interest rate mortgage. I have no desire, even at these low interest rates, to take out a new mortgage.

This is my favorite quote from the April thread on this topic.
eye.surgeon wrote: Wed Apr 14, 2021 11:08 pm Because my kids don't sleep in my taxable account.

Maybe the mods should merge this thread as well...
viewtopic.php?p=5946436
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LadyGeek
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Re: Anyone regret paying off mortgage early?

Post by LadyGeek »

^^^ Done, thanks.
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jay22
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Re: Anyone regret paying off mortgage early?

Post by jay22 »

PowderDay9 wrote: Thu Jun 10, 2021 2:00 pm No regrets whatsoever. It was the right decision at the time to reduce leverage by taking low earning bonds and cash and paying off a higher interest rate mortgage. I have no desire, even at these low interest rates, to take out a new mortgage.

This is my favorite quote from the April thread on this topic.
eye.surgeon wrote: Wed Apr 14, 2021 11:08 pm Because my kids don't sleep in my taxable account.

Maybe the mods should merge this thread as well...
viewtopic.php?p=5946436
Love that quote. :sharebeer
coachd50
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Re: anyone regret paying off mortgage early

Post by coachd50 »

Admiral wrote: Thu Jun 10, 2021 11:56 am
coachd50 wrote: Thu Jun 10, 2021 10:11 am
Admiral wrote: Thu Jun 10, 2021 10:02 am
ttcbj wrote: Thu Jun 10, 2021 9:33 am I didn't purchase my first house until 35 (around the time I got married and had my first child). I paid cash for it. It's a house we plan to stay in forever. Around that same time I also paid off my wife's medical school debt (I think it was about $40k).

In retrospect, both of these decisions yielded lower long-term wealth. But, 10 years later I have plenty of wealth and I don't regret it at all. I like the psychological benefits and simplicity.

One thing that has really surprised me in life is how much my attitude towards money has changed as my wealth has changed. Up until my early 30s, I was super frugal, almost grumpy about spending. My spending didn't increase even as my income did. After getting married and having kids, our spending increased dramatically, but it was still conservative, saving ~30% of pretax income, 50% of after tax income. Post-COVID, its really sunk in for me that we have 'enough' and life is short, and I am starting to spend a bit more (just bought a Porsche for $100K, and a $6K small catamaran, for example, very supportive of any spending my wife wants to do).

I think the truth is that paying off, or not paying off, your house isn't likely to make a huge difference in your wealth. It is all the other decisions you make (living below your means early in life, saving a lot, making career decisions that increase your income, not buying too much house, etc) that will really add up to significant wealth.

I think the decision to pay off a mortgage feels big because of its psychological impact, but in terms of building wealth you'd be better off focusing your efforts elsewhere, because its pretty marginal. If it were not so marginal, this thread would have a more decisive outcome, instead of many good points on each side.

EDIT: Perhaps a rule of thumb would also be, if paying off your mortgage would make you want to put your house in your financial calculations as an asset, because it would constitute a significant portion of your net worth, don't do it. If you can treat your house as just a place you live after paying it off, and your remaining liquid assets are still very sufficient for retirement etc, go for it if it pleases you, but it's not super important either way.
Real estate is the single largest asset most Americans have by far.
Not Bogleheads, probably, but there it is. It’s quite significant IRL.
I don't really understand your post here. Yes, the home one lives in is probably the single largest asset that most Americans have, but that doesn't discredit the idea that "pay down/pay off early" vs pay as scheduled isn't really going to impact personal finance or wealth that much overall does it? Or am I missing something?
This poster wrote that "your house isn't likely to make a huge difference in your wealth" as well as "if paying off your mortgage would make you want to put your house in your financial calculations as an asset, because it would constitute a significant portion of your net worth, don't do it."

I am simply pointing out the fact that the house IS, in fact, the majority of the average person's wealth. There are many ways to recapture this wealth, in particular via imputed rent or by selling, taking profit, and downsizing. In effect, homeownership is a very important aspect of wealth creation, esp b/c most academic research shows that those who rent for less than a mortgage costs tend not to invest the difference (Bogleheads aside).

I do agree that in the long run buying a bond at 1% and paying a 2% mortgage may not make a huge difference. But I do feel strongly that keeping a 2% mortgage and investing in a balanced portfolio instead of pre-paying is the best of both worlds: you get a cheap house payment AND the return given by the markets.
Thank for the clarification and explanation. I understand now.
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