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

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In the LearnVest Personal Stories series, everyday people share the details of their money lives, discussing the individual choices they’ve made and how it’s impacted their financial journey.

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 off the other $155,000 of my mortgage in two years.

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.

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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.)

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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.

  • 2CENTS

    Ugh… Get to the way you paid it off in the first paragraph. It’s easy if you have extra money. Add an extra Grand every month and you’ll be free within 5 years on a $100,000 loan. Use a amortizing calculator, punch in what you think you can pay each month and see the pay off time frame. The Key is stay the course and don’t stop.