$135k mortgage. $168k to pay it off in 20yrs?

[JEDI]

I paid off my mortgage. (Yay!)

got a $135k mortgage 20.5 yrs ago.
refi to 4% ~15yrs ago.
mortgage payments (only Principal and interest) = $700/month

So is my math right?
I only paid about $33k in interest?


edit:
wrote a $24k check to pay it off.

hm.. I'm off a little on the dates.
guess I refi'd to 4% 13yrs ago.
I think I have 2-3 yrs left on my 15yr refi.

and I think my original mortgage was 6.75%

 

[Cappuccino]

wow another 100k elitist wtf is going here AT.

 

[cbrunny]

 

[HumblePie]

I paid off my mortgage. (Yay!)

got a $135k mortgage 20.5 yrs ago.
refi to 4% ~15yrs ago.
mortgage payments (only Principal and interest) = $700/month

And hopefully your home is now worth more than $168K and you are screwed if it is worth less than $135K.

 

[cbrunny]

And hopefully your home is now worth more than $168K and you are screwed if it is worth less than $135K.

not really screwed if its worth less than 135k somehow. It would only matter if he chose to move, or chooses to at a time when it is worth less than 135.

 

[HumblePie]

not really screwed if its worth less than 135k somehow. It would only matter if he chose to move, or chooses to at a time when it is worth less than 135.

Well screwed is a bit of a strong word there, but basically you know what I mean when i was saying that in a cheekish manner.

 

[rh71]

XLS spreadsheet to calculate it is here: https://www.vertex42.com/ExcelTemplates/loan-amortization-schedule.html (great for planning additional principal payments too)

So you started around 1996 (what rate?) and then refinanced to 4% in 2001. Up until 2001, that would already be about $30k in interest assuming 5% interest rate (I'm sure it was higher). About $124k left when you refinanced, which means paying till the end of that 15 years it's another $41k in interest.

$30k
+41k
====
71k total interest paid

See if I'm close.

 

[IronWing]

Congrats on paying it off!

 

[dullard]

I paid off my mortgage. (Yay!)

got a $135k mortgage 20.5 yrs ago.
refi to 4% ~15yrs ago.
mortgage payments (only Principal and interest) = $700/month

So is my math right?
I only paid about $33k in interest?

Good job in paying off the mortgage, it does feel great once you reach that point. All you really have to do now is make sure food is on the table and miscellaneous taxes are paid and you are set for life.

Your math is way off. Even if we do pretend that you paid only $700/month for 246 months, you would have paid a total of $172,200. That would end up being $172,200 - $135,000 = $37,200 in interest.

But, you either (1) didn't pay $700/month, (2) you made a large lump sum payment that you didn't tell us about, (3) you got a ~1% interest rate (didn't happen) in 1996 and stupidly refinanced it up to 4%, (4) didn't have a $135,000 mortgage, or (5) had a bank error in your favor.

Without the proper information, I suspect #4 to be true. You probably had a $100,000 mortgage after down payment if we can believe your other numbers. #2 is also a good possibility.

 

[rh71]

^ according to the XLS, paying $724/mo. is accurate on a $135k 30-year 5% loan. 7% would bring it up to $900/mo. So yes, need more details.

 

[BurnItDwn]

Congrats ...

my mortgage is from 2008 .. I have paid down approx 1/3 of the principal and have refinanced down from a very high rate to 3.15% .. Im hoping to be paid off within about 10-13 more years (before I turn 50)

 

[dullard]

^ according to the XLS, paying $724/mo. is accurate on a $135k 30-year 5% loan. 7% would bring it up to $900/mo. So yes, need more details.

Like you said thogh, 5% is unlikely. 7.5% to 8% was much more common in 1996.

 

[Red Squirrel]

Mortgage math is weird, I don't really try to understand it. I just keep making my payments and watch the number slowly go down. I pay $600 biweekly and that seems to pay the mortgage down by about 10 grand per year when I compare year end statements. 600*52 = 31,200 so I figure 21k goes towards interest and any other costs. (taxes?)

I figure I have about 11 years left at this rate as the mortgage is a bit over 100k left right now. If that math is close to right that's actually pretty good though, as it's a 25 year mortgage that will be paid off in less than 20 years.

If I can pay it down by 40 I'll be happy, not a lot of people manage to have their house paid down by then. My parents just paid theirs off recently and they're past 50. Costs of living keep going up though so I have a feeling at one point I'll have to lower the amount I put into the mortgage. My base payment is $400 biweekly, so I put $200 extra.

not really screwed if its worth less than 135k somehow. It would only matter if he chose to move, or chooses to at a time when it is worth less than 135.

This. Not sure why people obsess so much with the value of their house. The more the value goes up, the more the taxes go up, and if value goes down the taxes won't go down. So value going up actually hurts you in a way and even worse if it fluctuates as each up swing means higher taxes. If you sell, your next house's value will also have gone up so you'll be paying more. Comes up to the same. Of course there is a "feel good" aspect to when your house goes up in value.

 

[louis redfoot]

Mortgage math is weird, I don't really try to understand it. I just keep making my payments and watch the number slowly go down. I pay $600 biweekly and that seems to pay the mortgage down by about 10 grand per year when I compare year end statements. 600*52 = 31,200 so I figure 21k goes towards interest and any other costs. (taxes?)

I figure I have about 11 years left at this rate as the mortgage is a bit over 100k left right now. If that math is close to right that's actually pretty good though, as it's a 25 year mortgage that will be paid off in less than 20 years.

If I can pay it down by 40 I'll be happy, not a lot of people manage to have their house paid down by then. My parents just paid theirs off recently and they're past 50. Costs of living keep going up though so I have a feeling at one point I'll have to lower the amount I put into the mortgage. My base payment is $400 biweekly, so I put $200 extra.



This. Not sure why people obsess so much with the value of their house. The more the value goes up, the more the taxes go up, and if value goes down the taxes won't go down. So value going up actually hurts you in a way and even worse if it fluctuates as each up swing means higher taxes. If you sell, your next house's value will also have gone up so you'll be paying more. Comes up to the same. Of course there is a "feel good" aspect to when your house goes up in value.

you can always buy an old rv and park it dirt cheap

 

[JEDI]

Your math is way off. Even if we do pretend that you paid only $700/month for 246 months, you would have paid a total of $172,200. That would end up being $172,200 - $135,000 = $37,200 in interest.

But, you either (1) didn't pay $700/month, (2) you made a large lump sum payment that you didn't tell us about, (3) you got a ~1% interest rate (didn't happen) in 1996 and stupidly refinanced it up to 4%, (4) didn't have a $135,000 mortgage, or (5) had a bank error in your favor.

Without the proper information, I suspect #4 to be true. You probably had a $100,000 mortgage after down payment if we can believe your other numbers. #2 is also a good possibility.

whoops.. Choice 2.

wrote a $24k check to pay it off.

hm.. I'm off a little on the dates.
guess I refi'd to 4% 13yrs ago.
I think I have 2-3 yrs left on my 15yr refi.

and I think my original mortgage was 6.75%

 

[rh71]

whoops.. Choice 2.

wrote a $24k check to pay it off.

hm.. I'm off a little on the dates.
guess I refi'd to 4% 13yrs ago.
I think I have 2-3 yrs left on my 15yr refi.

and I think my original mortgage was 6.75%

$135k mortgage for 30 years at 6.75% = $875.61 per month payment.
paying this up to 13 years ago means you paid $70k in interest before refinancing.
$120k remaining on the refinance @ 4% starts around year 2004, interest paid from then till now is $39k.

$70k
+39k
====
$109k interest paid

Your $24k payoff is only off by $4k (you only owed $20k this month using my guestimate dates) so I'm pretty sure these numbers are close. It's crazy to think you paid $70k less interest than you did and not realize. Don't forget the 2 closing costs either.

 

[rh71]

Mortgage math is weird, I don't really try to understand it. I just keep making my payments and watch the number slowly go down. I pay $600 biweekly and that seems to pay the mortgage down by about 10 grand per year when I compare year end statements. 600*52 = 31,200 so I figure 21k goes towards interest and any other costs. (taxes?)

I figure I have about 11 years left at this rate as the mortgage is a bit over 100k left right now. If that math is close to right that's actually pretty good though, as it's a 25 year mortgage that will be paid off in less than 20 years.

If I can pay it down by 40 I'll be happy, not a lot of people manage to have their house paid down by then. My parents just paid theirs off recently and they're past 50. Costs of living keep going up though so I have a feeling at one point I'll have to lower the amount I put into the mortgage. My base payment is $400 biweekly, so I put $200 extra.

Canada is a bit different as I understand it. Don't you have a $ penalty if you pay it off early? Or is that only on some loans? My cousin did mortgages for TD and she couldn't believe that we could pay it off early here. Means less interest for the banks. Maybe it's because of competition here who don't charge for early payoff.

 

[Red Squirrel]

Canada is a bit different as I understand it. Don't you have a $ penalty if you pay it off early? Or is that only on some loans? My cousin did mortgages for TD and she couldn't believe that we could pay it off early here. Means less interest for the banks. Maybe it's because of competition here who don't charge for early payoff.

I think it differs between banks but if I recall with mine I am allowed to raise the payment to as high as double the base, so I could go as high as $800 biweekly, and think I do have the option to put a lump sum on it at any time but there is a limit. I'm not sure if you can just pay it down without facing any kind of penalty but not something I ever really asked as unless I win the lotto I don't think it's something I have to worry about. When the mortgage opens (usually every 5 years) then you can do anything you want I think, like adjust the base payment, or put a lump sum etc.

There also used to be the option for a 40 year mortgage, but I don't think they have that anymore.

 

[louis redfoot]

this thread reminds me of a very large thread from another ot forum several years ago, regarding paying off a mortgage vs. holding a low rate loan. having been on both sides of the fence, i am definitely for paying off a house. dollars and cents aside, the peace of mind of having a home base squared away is worth alot... i'm off the treadmill, my only expense is food!

 

[rh71]

^ we are within 4 years of paying it off too and I can't wait to have that feeling of retaining every bit of all the incoming paychecks. But it's not all green grass ahead though - college fund x 2.

 

[s0me0nesmind1]

Mortgage math is weird, I don't really try to understand it. I just keep making my payments and watch the number slowly go down. I pay $600 biweekly and that seems to pay the mortgage down by about 10 grand per year when I compare year end statements. 600*52 = 31,200 so I figure 21k goes towards interest and any other costs. (taxes?)

I figure I have about 11 years left at this rate as the mortgage is a bit over 100k left right now. If that math is close to right that's actually pretty good though, as it's a 25 year mortgage that will be paid off in less than 20 years.

If I can pay it down by 40 I'll be happy, not a lot of people manage to have their house paid down by then. My parents just paid theirs off recently and they're past 50. Costs of living keep going up though so I have a feeling at one point I'll have to lower the amount I put into the mortgage. My base payment is $400 biweekly, so I put $200 extra.

This. Not sure why people obsess so much with the value of their house. The more the value goes up, the more the taxes go up, and if value goes down the taxes won't go down. So value going up actually hurts you in a way and even worse if it fluctuates as each up swing means higher taxes. If you sell, your next house's value will also have gone up so you'll be paying more. Comes up to the same. Of course there is a "feel good" aspect to when your house goes up in value.

How is mortgage math weird? I mean believe me, I can't do it in my head - especially with "what if" scenarios, but the concept is simple: Interest accrues daily based on how much principle you have left to pay (the amount of the loan, essentially). Therefore, doing something as simple as making bi-weekly payments (instead of 1 lump monthly payment) WILL make a difference in the amount of interest paid.

Also, home value on the market != home value of the government. You should also be fighting the appraised tax value of your home every single year.

I'm hoping to have our house paid off by approx 2/2021 which is right around when we're going to want to move to a new better house for school district reasons.

 

[JEDI]

$135k mortgage for 30 years at 6.75% = $875.61 per month payment.
paying this up to 13 years ago means you paid $70k in interest before refinancing.
$120k remaining on the refinance @ 4% starts around year 2004, interest paid from then till now is $39k.

$70k
+39k
====
$109k interest paid

Your $24k payoff is only off by $4k (you only owed $20k this month using my guestimate dates) so I'm pretty sure these numbers are close. It's crazy to think you paid $70k less interest than you did and not realize. Don't forget the 2 closing costs either.

thx! don't remember closing costs for original mortgage. maybe 1% of cost? 1.35k?
refi was FREE! no closing costs. (nothing rolled over to balance.)

$135k + $109k +1k = $245k paid
house is worth $300k

300-245= $55k

55/245 = 23% growth
23%/20yrs = 1.1% growth per year

Would have done better renting an apt and investing the $ in index funds?

 

[louis redfoot]

thx!

Would have done better renting an apt and investing the $ in index funds?

a bad stock is toilet paper. with real estate, no matter what you still have a house to use and live in. that's money i wouldn't gamble with

 

[overst33r]

thx! don't remember closing costs for original mortgage. maybe 1% of cost? 1.35k?
refi was FREE! no closing costs. (nothing rolled over to balance.)

$135k + $109k +1k = $245k paid
house is worth $300k

300-245= $55k

55/245 = 23% growth
23%/20yrs = 1.1% growth per year

Would have done better renting an apt and investing the $ in index funds?

You would have done better even with an investment with much lower volatitlity, i.e. CD's, and that's not even including maintenance costs. A home is generally not a good investment, it's a place to live.

http://jlcollinsnh.com/2012/02/23/rent-v-owning-your-home-opportunity-cost-and-running-some-numbers/

 

[louis redfoot]

You would have done better even with an investment with much lower volatitlity, i.e. CD's, and that's not even including maintenance costs. A home is generally not a good investment, it's a place to live.

http://jlcollinsnh.com/2012/02/23/rent-v-owning-your-home-opportunity-cost-and-running-some-numbers/

my house: $260k in 1999, $910k today on zillow. and it's been a nice home in a nice neighborhood the entire time. i lost money on the other house though, it had some intangible benefits