How I Paid $100,000 Off My Mortgage in Under 2 Years

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In our Money Mic series, we hand over the podium to people with controversial views about money. These are their views, not ours, but we welcome your responses.

Today, one man shares how he’s tackling one of the biggest debts many of us will ever take on: a mortgage.

August 1, 2012, will forever be a day etched in my memory.

It was the day my lifelong dream of being a homeowner finally came true, and I moved into a beautifully renovated three-bedroom bungalow in the suburbs of Toronto, Ontario.

I purchased my home for $425,000, and through all my years of hard work and financial discipline, I was able to make a sizable down payment of $170,000, which left me with a five-year fixed rate mortgage of $255,000 at 3.04%.

Six digits of debt are intimidating, especially when you’re a single homeowner. But at 29 years old and just 15 months after buying my house, I’ve already paid $100,000 off my mortgage … and I plan to pay the other $155,000 off before I turn 31.

How did I do it? Let me explain.

A House Starts With a Dream

Ever since I was 10 years old, I’ve dreamed of being a homeowner. That’s when I was sitting at the dining room table at my mother’s house and heard that my aunt, who had lived paycheck to paycheck and rented an apartment her whole life, had been laid off from her job after 20 years and would have to move in with my grandmother. There was no way I ever wanted to find myself in that situation, middle-aged and unemployed with no savings in the bank.

So I started saving toward my first home even before I graduated from university. While in school, I worked three part-time jobs (meat department clerk at a supermarket, administrative assistant at my university’s MBA office and freelance writer), earning over $10,000 annually. Instead of taking summers off, I worked full time as an administrative assistant in a government office, earning another $10,000 per summer, enough to cover the next year’s tuition. After a 60-hour workweek I was exhausted, but I knew I wanted to graduate debt-free.

RELATED: 7 Federal Student Loan Repayment Options: What You Need to Know

I’ve always been a saver, so frugality was second nature to me. I purchased my textbooks secondhand, cycled and rode public transit. I limited myself to coffee once a week with friends and only went out when it benefited my career. Food is a major expense for students, so packing my lunch was a no-brainer—I estimate that saved me at least $5,000 a year. I graduated university debt-free, with a net worth of $70,000.

(I should mention here that while universities are similar to those found in the U.S., post-secondary education is a lot more affordable here in Canada—while a private university could cost $200,000 in the U.S., the cost of a similar four-year degree in Canada would be more like $80,000.)

RELATED: How I Did It: Applied for 100 Scholarships

After eight months of working in a supermarket post-graduation, I was fortunate to land a full-time job in the financial industry, earning $32,000. I opened an investment account and started contributing $250 weekly toward investing in mutual funds to save for my home. I was a disciplined saver—even after graduation I continued to live like a student in the basement of my mother’s home, paying $600 a month in rent. Through my full-time and part-time jobs and my freelance work, I was able to save an additional $110,000, bringing my net worth to $180,000, in only two and a half years.

  • http://Www.debtfreeindubai.com desertscrooge

    What a smart young man! Congratulations!

    • Eastwestcoaster

      I’d say he was lucky and fortunate, too that he was able to get paid so much. That helped him big time.

      • Roger Maddox

        Must have went to college to get a job like that. He also didn’t waste his free time lounging. He even worked for $10-11 on the weekend for extra cash. He

        • Eastwestcoaster

          Yeah, because during school, I was a full time student 8-12 hours a day. Had a 3.6 GPA in my major. Then during the summers I was paid about 10-14$ an hour working for state fish and game and as a landscaper (manual labor), but that paid for my living costs during school. Everyone’s situation is different. If you read below, I’m a biologist with a job in the field I majored in (earned a master’s degree), but had to take out massive loans to get the best schooling and connections to get to where I am today and now I’m strapped with ridiculous loans like most people who went to college in the past 10-15 years.

  • jpmonte

    Basement apartments are usually illegal here in NYC, they are firetraps.

  • Erica

    I am inspired after reading this story! Congrats Sean, the determination and resolve to pay off the mortgage is astounding! I am sure you will reach your other goals with the same gusto and success :)!!

  • TR

    @jpmonte:disqus. just about every brownstone has a basement apartment or a 3rd floor apartment. Especially in Brooklyn and Queens. Great article. His determination is inspiring.

  • anthonysmom

    Bravo to you, young man!! I am so impressed and can say that THIS is the best article I’ve ever read on LearnVest!! It is so refreshing to finally read a story of someone who decided to be weird and not be normal – you made the decision to live on (way) less than you make and to kill that (huge) mortgage debt as quickly as possible! Wow, wow, wow. My husband & I are huge fans of Dave Ramsey and paid off $122,000 in debt in 4 years. We’re currently working on the remainder of our $124,000 mortgage balance. I will be sharing your story with our Financial Peace University class in a few weeks when Dave teaches on mortgages. You, sir, are an inspiration!

  • Matty

    Great for him. Wht about those of us who live in the real world?

    • ML

      It astounds me how many up-votes this comment received. What part of his life is not “the real world”? He’s committed to working three jobs and live a frugal lifestyle even when he doesn’t need to according to mainstream society because he has “good debt.” His income for his primary job is very much in line (if not on the lower end) of a typical college graduate, so it is very inspiring that finally someone who works a “normal” job can show us how to make choices to make a drastic financial difference in our lives. This story is an inspiration for me, as someone who works in the education field, to inspire my students to make good financial decisions starting from very young, before you’re loaded with kids, credit card debt, and other obligations (e.g. aging parents you have to take care of). It seems the younger you start making good financial decisions, there is almost a compounding effect in how your financials will improve. I’m not a finance teacher but I will insert this story in any of my life lesson moments.

      I completely understand the “real world” comments for articles written by those who make over $100K (even though those people also have real struggles), but this comment sounds almost like a cop out in regards to this article, which is written by someone who has given very pragmatic advice to tackle huge amounts of debt and be on comfortable financial footing.

    • Petunia100

      What a complainy-pants.

    • J:L

      I work in the exactly same field as the author, have 4 children and a husband who makes about the same as me. We are working really hard to be debt free in 10 years. Additionally, the goal is to save a half a million for the retirement in the same amount of time. Things are slow to come when you have a large family and such expenses as owning a car are non negotiable in rural areas. i would say that’s as real as it gets. Yes, it is very difficult to always be frugal but it is absolutely achievable. We are on a good track.

  • Rona

    A good article someone who actually worked a lot to make things happen. Congrats it is awesome!

  • Marty

    Super inspiring!!

  • Jem

    Sean, I am so impressed at your determination and discipline. Keep up the good work. Also a fan of Scott McGilvary!

  • Faith

    wow, I can’t even find a house below 700K. but good for you and your cheap housing location…

  • Fluff

    I am sorry, but this is not inspiring. There is no math anywhere in LearnVest’s articles. How is paying off a loan at 3% better than putting it in the stock market at a higher rate, or taking out a pre-tax amount and putting it into your 401k? It isn’t. It is inspiring to save and to get a house that, like on that show, allows for income, but there also needs to be balance. Take a few vacations, enjoy yourself and go out with your friends even if there isn’t – god forbid – a business reason behind it. LearnVest’s articles are not good advice for the most part. They are fluff about saving and debt that teach nothing about mutual funds, 401ks or address real tradeoffs. Beware before following the “advice” in these puff pieces that they don’t even endorse.

    • ML

      When the writer mentioned his net worth, he mentioned investments, emergency funds, and retirement savings, so it does sound like he’s doing all of the above, not just putting all disposable income toward paying off his mortgage. He is also relatively young, so there’s some merit in addressing the psychological burden of having debt and trying to knock it out (even when it defies the interest rate difference logic), especially since he’s also been saving at the same time. He has plenty of time to play catch up (if he needs to play catch up at all; it doesn’t sound like it), and he’ll be able to do it with the huge relief that his house is his free and clear. Sean’s path is clearly not for everyone, but it doesn’t mean it’s illogical or that his article is useless.

      • Fluff

        Show me the math on how he is accomplishing what you suggest. As another poster shows, it isn’t possible.

        • ML

          Hi Fluff,

          I was simply commenting on your criticism of someone who decides to knock out debt instead of putting absolutely everything in higher yield investment accounts.

          Somebody else (commenter) factored in tenant payments as a possible explanation for how all the math adds up in Sean’s story.

    • Glas

      Why do sooo many people put sooo much effort into their 401k’s?? You put away money into 401k so that you can get it when you retire, but the government can increase taxes on it and who knows if the money you are paying into it goes to the people taking out money out of 401k right now or not. Sounds fishy like the Social Security. Don’t believe everything you hear!
      In my opinion, it’s better to live debt-free and build value in life and make money, than to just keep contributing so much to 401k in case you actually do get to have that money when you retire.
      I rather have bunch of houses paid off (some bought for $30k in cheaper areas that I can rent out) than put my money in this imaginary 401k.
      By the way, I’m not ignorant. I am a 30 years old girl, an engineer, with a master’s degree, making over $100k a year.

      • Tania

        Wow, 401Ks do not operate like the social security system. It is a defined contribution, not a defined benefit, plan. It works more like an investment vehicle. Payout from the 401K plan is based on the value of your monies when you retire, your money is not used to pay someone out a set amount of benefits before that. The benefit of 401Ks is it can put you in a lower tax bracket as the contributions decrease your taxable income at the time you earned the salary and you will likely be in a lower tax bracket when it is paid out when you retire. If your employer offers a match, you are increasing your compensation from them by contributing to the 401K. Employers offer 401K plans and matching contributions as a benefit to the employees, not to the company. The funds in the 401K do not belong to the employer. 401Ks are also subject to strict monitoring/audit regulations and investments are typically lower risk. Investing in real estate is great to but not without risk. I think your plan to earn passive rental income in the future is wonderfully entrepreneurial and admirable, I do think your understanding of how 401Ks work is flawed.

  • Hmph

    By not spending on housing, you could spend, on, well, loved ones. Good food. Retirement? http://www.theatlantic.com/business/archive/2014/02/americas-weird-enduring-love-affair-with-cars-and-houses/284049/

  • Gina Shi

    annual salary 32,000 assumed post tax
    supermarket 10,000 assumed post tax
    freelance 10000
    rent -7200
    annual saved 44800
    2.5 years 112000
    minus 8 mos. -5000
    assuming the salary diff. from supermarket work and normal salary

    107000 – excluding mutual fund earnings

    Alright so based on the information assumed from the article, you’re trying to tell me he saved $110k in 2.5 years on a spend rate of zero (minus rent)? How is that realistic? Who spends zero dollars in 2.5 years??? And that’s giving him the benefit of doubt, assuming all the numbers he provided were post tax. Also, other assumptions include that he spent ZERO money on food because he ate ONLY at home for 2.5 years. and bought ZERO birthday presents, went on ZERO trips, wore the same clothes for 2.5 years, etc. etc. I don’t know how much money was made via mutual funds, but it better have allowed him to make up for that $3k difference in money earned via wages of $107k and savings of $110k.

    I’m sorry, but based on the information in the article alone, I feel that LearnVest provides terrible and unrealistic advice for people who are actually trying to save towards their goals. I always get suckered into reading these fluff pieces because their titles are just so alluring. But congrats to Sean on his first home purchase.

    • Dylan

      What part of this article made you think that LearnVest was giving advice? Was it this disclaimer in the beginning?
      “In our Money Mic series,
      we hand over the podium to people with controversial views about money.
      These are their views, not ours, but we welcome your responses.”

      That would be like getting mad that you turned to the newspaper for
      financial advice and were unhappy with the advice you took from the
      horoscope and lucky numbers. This wasn’t a piece on financial advice,
      it was a financial interest piece about one young man’s EXTREME approach
      to buying a house. This would hardly be considered advice.

      • gshi

        You’re right. There’s a disclaimer. This changes everything. There’s no way any person could take advice from this piece nor any need for the numbers to make sense because there’s a disclaimer.

        You’re also right about the numbers and horoscope. I’d probably be happier after reading them too since they have the possibility of coming true.

        • JJ

          Perhaps the disclaimer should state that it is for “entertainment purposes only.” I get the disclaimer for legal purposes but why would a site that claims to offer financial advice do so without vetting their contributors writing? Are we to be happy with this kind of writing and logic because it has been disclaimed?

    • http://www.uniquegifter.com/ Anne @ Unique Gifter

      48,825 annual salary
      10,000 grocery store
      20,000 freelance
      18,600 (12 months of rent @ 1550; assumption)
      $97,425 Gross for 2013
      Dumped into an Ontario Income Tax Calculator, assuming zero deductions:
      $71,943 Net for 2013

      He alludes to being able to live off of the rental income of $1550, though that might be only in an bare bones budget situation, we don’t know. Deduct 1550×12 (note I’m deducting this as a gross amount, not net of the taxes on the revenue) to get $53,343 saved in 2013.

      Toss in a tax return or two, or assume his living costs are lower than $1550/month gross.
      100K saved in under two years.

    • http://www.uniquegifter.com/ Anne @ Unique Gifter

      In the downpayment savings stage, you are assuming he didn’t get any raises, and that the part time job was also the current 10K. There could easily have been additional side gigs, tuition credit fueled tax returns, and if he only made 5% on his 70K net worth at graduation (likely low for the time period), that’s another $7000 right there, ignoring any other returns on the monies invested during the 2.5 years.

  • Lizzie

    He did a good job saving for what he wanted but he has missed out on so much. He spent his entire youth striving for such a specific goal that I think if most people attempted this they would be filled with regret later in life. Did he ever have time to date? Make bad decisions? Grow and learn as a person? Is he going to spend the rest of his life living alone in his “dream” home since he never has time to go out and have fun and meet new people?

    This sounds like a horrible life. I have plenty of savings and investments and just a tiny bit of debt. I will gladly take some debt if it means I get to enjoy my life, travel, make bad decisions and never have any real regrets.

    • mostlywentzel

      He doesn’t seem to be unhappy, and just bacause he didn’t specifically mention it, it doesn’t mean he didn’t date or do fun things. Lots of people have fun without spending money. It sounds as though you think that because he had an income, he had to spend it a certain way to enjoy life. To each his own. Maybe this is fun for him. As for making bad decisions, why is that a necessity? The fact that he has made good decisions – at least financially – could have saved him a lot of the heart ache that most young people experience at some point. Grow and learn? I don’t think there is anything in this piece that can allow anyone to say whether he did or didn’t. This is a finacial articel, not self-help. Agree or not with his choices, but I think it’s presumptive to suggest that he has a “horrible” life.

    • C

      Totally agree.

  • Cvprimerica

    Just on the coin”

  • Cvprimerica

    My son is doing the same, it works.

  • John

    Pretty dumb. This guy earned 3% a year when he could have earned 10x as much investing in S&P500. I have a mortgage at 2.875% fixed for the next 15 years. I ain’t paying an extra dollar more than I need to. Way better to take that dollar and invest in something with a higher yield.

    • Jen

      Have you ever paid off your home? I did at 33- yes it was in a neighborhood with street parking where I (a chick) didn’t feel completely safe walking down the block at night, but when the economy tanked and I got laid off, I could survive on my very low wages as a temp secretary and didn’t even go into credit card debt. That was a huge relief to me. Some of us are more freaked out about finances than the “but he didn’t go out to drink or eat with friends!” crowd, and for us, paying off a mortgage early is a huge psychological lift. And now I put a HELOC on that 1st house to pay for my current home in a much better neighborhood (bought for a great price as a foreclosure). My tenants from the 1st place more than pay the HELOC, and my day job pays for my meals with friends, retirement, etc. This guy is on the right track for him, and he won’t regret it. Go ahead and stay on your own path, if that’s what you consider best for you. To each his own.

    • http://mauishopgirl.com/ Tania

      It’s not dumb, it’s just a different perspective on life, risk and planning for the future. I’m sure he’s capable of doing the math but has decided debt free living is something he aspires to, nothing wrong with that.

  • Eastwestcoaster

    Congrats! I’m wondering how you made $10,000 in a summer. I could only manage to make $3,500 at best in my field and in the U.S. it was only enough to cover 1/4 of my living expenses while in college. Also, it wasn’t feasible for me to be able to save money because of my student loan debt and it took me months after graduating to get a good-paying job. He also mentions the fact that it costs way less to attend college in Canada, which I already knew.

  • http://www.mommosttraveled.com/ CanCan

    Awesome! Why not continue to rent the top floor after paying the mortgage, wouldn’t you be functionally retired then?

  • Christina

    Does no one else have a problem with the math in this paragraph? How are you making $32,000 and save $110,000 in 2 1/2 years?

    After eight months of working in a supermarket post-graduation, I was fortunate to land a full-time job in the financial industry, earning $32,000. I opened an investment account and started contributing $250 weekly toward investing in mutual funds to save for my home. I was a disciplined saver—even after graduation I continued to live like a student in the basement of my mother’s home, paying $600 a month in rent. Through my full-time and part-time jobs and my freelance work, I was able to save an additional $110,000, bringing my net worth to $180,000, in only two and a half years.

    • Joshua Miller

      you have to remember she was investing it in a investment account, and those usually(especially if they’re like the ones at my bank which have a 1.01% for money market or 1.25% I can’t recall) and she’s doing it wisely she may have made her money grow significantly….I mean 2.6k per month(if this a per year amount she gave) is a lot if you’re renting from parents and probably buy the cheapest stuff you can get. 2.6 – 600 and 250*4 =1.316k that’s still a lot of money and if she’s putting the rest after insurance and food into savings I can see how she might get that much especially if she’s wise with her money when she invests….

  • LL

    But did you have a chance to really live life while working and saving for your house???

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  • Don Dressel

    I wish I had been as smart as you at your age! I had a 15 year loan on my first home but my wife at the time talked me into selling the home and I would have kept it but I got tired of fighting with her about it. Now at 57 I would have told her if she did not like it to leave!

  • Renata

    even after graduation I continued to live like a student in the basement of my mother’s home, paying $600 a month in rent…. yeah that is where you saved a huge amount

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  • Rcp916

    Awesome I live in the real world too! I’m setting up by weekly payments on our mortgage today and plan on paying at least 10% more on each payment! I drive a 20 year old Honda and try to be as frugal as possible.

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  • RS

    Great discipline!

    If you’re like most people, you’ll may realise later that your ‘passion’ is that which you were doing all along – saving money and getting rid of debt. Plus maybe being a writer part time.

    Nothing wrong with that! Some peoples’ passion is getting tatoos.

    And later, with marriage and kids, your brand of singular discipine with time and money is usually impossible. So you’ll be glad your house is paid off.

  • Annalisa

    This article really inspired me. Thanks so much for sharing your life with us…

  • oldwhitewoman88

    I appreciate the article and good ideas, but my spouse and I tried to pay off our house sooner, but other expenses make it near impossible. In my case, I still have to factor in neighborhood association fees, water bill, electric bill, gas bill, gasoline for all my vehicles and lawn mower, home and car insurance, taxes, maintenance and home and car repairs, for starters. We buy everything on sale and use coupons. Our house is one of the lowest in the area, so moving would not help. Both jobs we have are salary and on call 24/7, so getting a part time job never works out. In theory it sounds good, but the numbers just don’t add up.

  • Firstlass

    Good for you and thanks for sharing!