Three years ago I bought a house and got a really good interest rate at the time, 2.74%. Now interest rates are even lower and I'm hoping they stay low for at least another two years, but so much can change in two years. From the start I have wanted to pay down my mortgage as quickly as I can, every year putting 10% down.
The Numbers
Original Loan: $422,000Outstanding Balance: $322,936
Interest Paid: $29,176
So the title of my blog is "No Debt is Good Debt" and I hate interest. I pay off my credit cards in full every month. Obviously with the high interest credit cards charge everyone knows credit debt is bad debt. But everyone seems to think mortgage debt is good debt, especially with the "low" interest rate. Well if my interest rate stayed the same for 25 years, on $422K of borrowed money I will end up paying $160K in interest. That's 38% of the loan value.
So yes, there will be people out there that say its better to keep some debt and invest elsewhere, but do they REALLY realize how much interest they're paying?? Isn't it better to just pay off as early as possible and NOT pay interest? Who knows, i'm sure it can work both ways. But I hate paying interest and I especially hate the thought of having debt hanging over me. People need to understand that a mortgage is debt just like any other debt and they should not take on more debt than is necessary, and there is no reason to have it for 25 or 30 years.
Anyway my plan is to have my mortgage paid off in 5 years. As long as my husband doesn't divorce me and we stay employed in our current jobs for the next 5 years I think we can do it.
