Hey guys,
What do you guys think is a good age till you pay off ur house morgage? i recently bought a condo, and 25 years seems really far...n im 21.....

Almost 22 in 4 days!

 

As your earning power increases, you may find you can pay it off sooner than 25 years. Then your wife will want a bigger house and you get to start again. haha! Interest rates are low, don't sweat it for now.

 

I just finished paying off a $250K mortgage, it took me and my wife just over 15 years. I also bought when I was 21. I recall the first 5 years were at 8% interest. :-) I was paying the mortgage twice a month (instead of monthly) and gave lump sum payments almost yearly when I could afford it. The house is now worth about $450K, so it was a pretty good investment. It looks worse than it really is... Good luck!

 

choose bi-weekly payments. that will knock a few years off immediately. if you double up a payment here and there, and supplement a few lump sums (up to 20%), you can easily turn a 25 year into <20yr. last year i took a $365k mortgage ($90k down payment) on a 30yr ammortization and by tweaking payments etc. we are already at 21yrs until payoff.

however like an above post said, you'll likely upgrade to a more expensive property that will set you back a bit. very few people in an urban area are mortgage free before age 45. try moving to Vancouver where a million buck$ gets you an entry-level detached house in a decent area. $460k got me a 900sf loft condo. hey, at least interest rates are ~2.25%!

 

Damn dude, not to get completely off-topic but...

21 + Mortgage + Monthly fees + 20% down payment + furniture + g35 = ???

 

If you bought a condo at age 21 you're well on your way. Fortunately for debt holders the rates are at historic lows.

Personally I would never take on debt for that long a period since it is an enormous amount of money you are paying to the bank. I would either live in a smaller place or delay buying with a larger down stroke but all of us are different in that regard.

 

^+1 I was just going to write that, I think you should have waited prices should just keep falling

e.g. You can buy a whole street in detroit for 30gz YIKES (search eBay)
An identical house across the street from mines was going for $490 on MLS.ca now the asking price is $440

 

I personally don't think it makes a lot of financial sense to pay off your mortgage before you retire; unless interest rates are incredibly high, of course. Right now (imo), it makes more sense to use money you would put towards your mortgage elsewhere.

 

^ I love how you put that Kev,
I'm a part time Realtor and I say the same to everyone...
with todays low interest, it's not a point to strap yourself and try to pay down the whole mortgage. I agree in savings or re-invest in something else (try a cottage or rental property-or both-our cottage was a rental property).

I agree with paying down a mortgage to an extent that you are comfortable with the payments, but at variable rate ranging from 3.4-3.8, don't kill yourself. Those rates will remain for at least 2-3 years IMO.

 

You can't put a price on the satisfaction of being debt free for most of your life. IMO, for most people paying off debt promptly is almost always the wisest financial decision for the long term. It's too easy not to invest the difference or find somewhere with a superior after tax return.

Incredibly high is a relative term. I suspect you haven't seen anything too high like 18-20% in the early 80's or 12-13% when I bought my first couple of places. We'll probably never see anything over 7-9% for many years.

 

Our first mortgage was in that range. It hurts.

 

Wow, you bought at a young age! Yeah, the total outlay with high interest is astounding.

The average 5yr rate since 1970 is 10.95% so we can appreciate how low they are now.

I do agree today's rates makes it much less compelling for most to consider trying to pay it down earlier.

 

I agree. I didn't want to go into it too much for fear of being boring, or sounding like I know more than I do.

I guess what I meant was that I wouldn't make paying off my mortgage my only financial goal (like, I wouldn't be married to the idea), and having paid off my mortgage I may re-mortgage some of the equity in the house to invest elsewhere. All of this takes place within a financial plan, otherwise as you mentioned, it easy to spend it all on GT-Rs and M3! Hah.

By incredibly high I suppose I meant a rate that is higher than your expected rate of return on other investments. If I had a mortgage at 20% I'd do everything I could to pay down the principle; but like you said the likelihood of that happening soon is pretty low (knock on wood).

I think for most people bi-monthly payments on principle+interest and maybe one lump sum a year towards principle is a good way to stay ahead of your mortgage interest, provided you can still max out your rrsp contribution and do some safe investing.

 

I agree completely, Deane.

I had one of those from 1981-86. The variable rate peaked briefly at 22% - I still get a nosebleed just thinking about it.
If we had stayed in that house (our third) we would have been mortgage free at 36 years old.
Two more moves to higher priced cities put the kibosh that, but we managed to get free and clear on our current house about 10 years later.
I don't think we ever had a mortgage at less than 10.5%.

 

Good reply. I agree and especially about it all being part of a larger plan.

I always had high priorities for both saving and eliminating debt quick. Mind you I didn't drive something like a 335 when I was your age.