Freed by 50

Back in January I laid out my financial goals for 2019.  One of my major goals was to get my mortgage down below $350k, and ultimately set myself on a path to start paying more principal than interest on the loan.  Had I done nothing, I wouldn’t be paying more in principal until 2027.  Had I stayed on the course I plotted in January, I’d hit that goal in 2023 or sooner.

Back in August, I revised that goal and chose a different path.  The federal reserve has made a series of moves that caused mortgage interest rates to take a sharp downturn.  I saw an opportunity to shave 1.3% off of my mortgage rate on a 20 year note (rather than the 24 year mortgage I currently have) and only increase my monthly payments by $20!  The refinance would cost me $7k, but save me 98k over 20 years.  In essence, I was being offered the opportunity to buy back the four years I’d cost myself by finishing my basement for $7k up front and save myself $91k in the process!  What’s more, the day I inked the loan I’d immediately be paying more principal than interest.

It took two months and there were some dicey moments when the interest rate shifted almost half a point north before I finally caved and locked my rate at 3.125%, but the process is complete and I’m now happily four years closer to paying off my mortgage thanks to the miracle of lower interest rates.