Our Decision To Be Mortgage-Free

Why We Want To Be Mortgage Free

When I met Mr Thrifty 13 years ago, we both had the same house dream written on our internet dating profiles: a round house on lots of acreage with built-in bookshelves. We bought our current home, our first home, over 10 years ago, thinking we would stay in here a short time until we could build our “forever house”.

That had remained our plan until only recently.

Our round house was going to be big. Our current house is not tiny- it is 2000 square feet, with three bedrooms, a first floor study, and a large unfinished basement that we’ve never gotten around to finishing. Mr Thrifty is frugal in most things, but he has always had a dream of a big ‘ol house, with 4 bedrooms, a study, finished basement, three-car garage with workshop area, and lots of land to have a big garden and maybe raise some chickens. OK, well the chickens were my idea.

If it sounds rather expensive to you, that’s probably because it would be expensive, maybe even twice the value of our current house.

This past year, as I stopped working full time and we started plotting out our retirement plans in detail, we recognized three things: 1) Our needs- and our abilities- had changed, 2) Our ideas about what retirement looked like had changed, and 3) Our goal of bigger had changed to “just enough”.

We had always planned a house to age in, with a first floor master, bathroom, kitchen, and laundry room. In the past 10  years, I have developed arthritis, and while we will eventually have a home that isn’t 2 stories, living in a home with extensive gardens, lots of yard work, or a long unpaved driveway isn’t the best long-term idea for me. (Should I be unable to drive and disabled and need accessible transportation, they are unlikely to come down a long driveway to pick me up.)

We’ve also started asking ourselves, “What are our big complaints about this house that we feel the urge to leave it so much?”

Our answers:

-Wasted space, like the formal dining room and sunroom that are playrooms (temporary life phase)

-Three kids sharing two rooms and keeping each other awake (this was temporary once we moved the toddler out of our bedroom and all is now working fine)

-Ugly paint, white kitchen cabinets we hate (fixable)

-Can’t fit 2nd car in the garage (fixable by getting rid of stuff/finding better storage solutions)

-No place to put kid stuff (again, too much stuff!)

– Stairs to laundry room and upstairs (livable for me now)

-Yard is small, not much to play with,  and backyard isn’t too far from the busy street (easily fixed with a fence and play set)

-More room needed for entertaining/kid stuff (fixable by finishing basement/getting rid of stuff!)

There are a lot of positives too: perfect school district, awesome garden tub in our master bath that is great for my arthritis, great neighbors, a pool, YMCA, and playground within a 10 minute walk, preschool within walking distance, lots of shops, restaurants, and theaters within easy driving distance, bike paths, safe area.

We just couldn’t see ourselves uprooting the kids before the youngest finished school. And finishing school is going to be done in 16 years. Our oldest turns 8 in a few months, and will be graduating in 10 years. Mr Thrifty could be retiring himself around the time our youngest graduates, though he may very well work until she is done with college. It’s coming faster than we think, and we wanted to be sure we had a paid-off home when he retires.

And where we will retire? Well, we’re not so sure we want to stay in the Midwest, with cold winters. If our kids move out of state, and have kids themselves, we may want to have the flexibility to live near them. Or the flexibility to rent out our house for 6 months of the year and rent an apartment in Hawaii. If we built a big fancy dream home, we might have a harder time leaving it behind. And we might have a lot of empty useless space when we no longer have 3 kids in the house.

So we are opting to stay in place during this season and working on paying off the mortgage as soon as possible. When we downsize in the future, we will only own a home that is equal or less in value to this one. If we build- and we still may- it will be something with a smaller footprint and suited to a smaller family size, like this.

There is a lot of debate about paying off a mortgage early vs. keeping a mortgage and investing the extra you would have used to pay down a mortgage.

I honestly would not fault anyone from choosing the alternate path from us. If your investment interest is greater than your mortgage interest then the math is in your favor. If you have a fixed rate mortgage and it is your only debt, then sure, go for it.

Our decision is based on our being risk-averse. If my husband loses his job, or there is a major illness, or a death, we want to be sure we have  roof over our heads. We feel confident we can reach our retirement goal and pay off the mortgage, and paying off the mortgage will mean our monthly expenses will decrease by about $1000/month.

We hope to get there within 10 years. That means an extra $500 month, or $6000/year, we have to pull together to pay down the mortgage. As I finish this degree, and hopefully find a part-time online educator job, that should become much easier, as any additional income is not money we need to live on, but money to throw towards those goals.