“Pay off your mortgage in 5 Years before retirement, and that’s one less bill you’ll have to worry about when you’re on a fixed income.”

Why should you pay off your mortgage faster?

Because once you get that far, you no longer have any mortgage payments. For most households, housing is the largest cost item. And by paying off your mortgage faster, you can eliminate this cost item.

And that means quite a bit.

And not only that – the sooner you pay off your mortgage, the less money you spend on interest in your life. And I know – right now interest rates are historically low. But not everyone is taking advantage of this low-interest rate yet. For example, our linear mortgage had an interest rate of 4.25% due to a risk premium because I work for myself.

Few people make the calculation, but the numbers are impressive. Because if we let that mortgage run for 30 years at that interest (which is of course not entirely realistic), we would pay our house twice. Once in repayment, and once in interest.

TruthinEquity provides the five golden tips for you to pay off your mortgage in 5 years.

1. Paying off your mortgage should be a priority

If you have a linear or annuity mortgage, you automatically repay it over the term. But if you want to pay off faster – in 10 years or less – paying off your mortgage should take priority over a lot of other things.

You will have to leave things in order to make your annual repayment. The better you can live below your means, the more you can pay off annually. The difference between your income and your expenses is your savings margin. This is the amount that can go towards your mortgage.

2. You have to swim against the current

Yes, because you are probably one of the few who pays off her mortgage faster. Most people talk a lot about experiencing more freedom, but few people actually take the difficult steps. They prefer comfort at the moment.

There’s nothing wrong with that, but it does sometimes make you feel like you’re swimming against the tide. If you explain what you are doing at a birthday, you will probably get comments such as: but then you will miss out on mortgage interest deduction!

3. You’re on a sort of ‘lonely mission’

Of course, it all depends on what kind of circles you are in and how open your friends and family members are. But in many situations, it is uncomfortable to talk about what you have achieved.

And that sometimes feels difficult, because the accelerated repayment of your mortgage is quite an undertaking. You feel proud and happy when you reach a milestone. And you will especially celebrate that joy on your own.

4. You have to make a plan

Without a plan, you automatically fall back into old patterns of comfort and spending (too much) money. Then it suddenly feels very tempting to use that financial windfall for a trip or a new bathroom, instead of paying off your mortgage faster.

Our plan was quite simple: try to repay the maximum amount each year and also save for the last major repayment at the end of the fixed-rate period. This is a period in which we had four weeks to pay off the entire mortgage before we had to commit again for at least another year.

5. You must have a long breath

Happiness is relative. I often hear people say I’m “lucky,” and they’re right. I am lucky with many things. But when it comes to the mortgage, it was mainly a matter of making the right choices.

  • You could have opted for a larger and more expensive house with a higher mortgage.
  • You could have spent my income on renovations, more expensive trips, cool gadgets, a trendy car, or expensive subscriptions.
  • You could have chosen to use my savings differently.
  • You could have lost your focus during those years and stopped paying or skipped a year. The boring middle part is anything but inspiring.