Freed by 50

One of my major goals for 2020 was to make one very large lump sum payment to my mortgage this year. I had planned to do this last year, but plummeting interest rates presented the opportunity to refinance so I reallocated some money to that and pushed the goal to 2020.

My original goal was to get my outstanding balance below $350k, which was more of an arbitrary number than anything. After refinancing to a 20 year loan, I had more tangible numbers to work with. My refi had me on target to be mortgage free on my 60th birthday, which would never do. So I’ve been trying to reign that number in.

Today I’m happy to report that I made a single payment of $32k, which turned out to be 8.6% of my outstanding balance. I had to come in a little short of 10% after I had my dryer, an AC unit, and my truck all break in July. Our mortgage now stands at $330k, and in the first year of my 20 year loan, I am down to 17 years and 1 month. Now I’ll be mortgage free on my 57th birthday, a full two years before my last child graduates high school!

Right now I plan to do this at least one more time, in August of 2021. This would knock me down below a 15 year loan and have us on track to be below $200k outstanding balance by 2022. Beyond that, though, I can’t say if we’ll continue to make large lump sum payments like this.

Once my individual investment account surpasses my mortgage balance (possibly late 2021) I’m not sure if I’ll be as concerned about the mortgage. Given our 3.125% rate, I’ll likely earn far more money putting the remaining lump sums in the market. This will have to be something I evaluate next summer since any number of things can change between now and then.

With this big win today, almost all of my goals for 2020 have been met with four months to spare. I have another big liquidity event coming up in November, and I will try to outline some goals for that before it happens.