How We Paid Off Our $195,000 Mortgage in Less Than 4 Years

By Andy Hill   Updated 05/05/2021 at 4:13 pm

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Last month, we paid off the $195,000 mortgage on our dream home.

After 4 years of focus and partnership with my wife Nicole, we’re now completely debt free and thrilled about the future ahead of us.

To help our two young children remember this family tree-changing moment in our lives, we decided to celebrate with them.

Instead of just burning the mortgage and tipping back a few glasses of champagne (which we did too), my wife came up with a completely original idea: “The Mortgage Pinata”.

The Mortgage Pinata

Yes! It’s just like it sounds.

We made a paper mache pinata out of our mortgage papers and our kids got to clobber the candy, toys and quarters right out of it!

The kids had a blast and so did we. This was a moment we wanted our kids to remember. It was the day we decided that our family was going to get out of debt for life.

Zoey Proud of Her Paper Mache Work
Zoey looks proud of her paper mache work
Nicole cutting the Mortgage Pinata
Nicole cutting the Mortgage Pinata

When it’s all packaged up into a cute pinata whacking story like that, paying off your mortgage sounds pretty simple and easy. Well, it was slightly more complicated than that.

To break it down, I’ve outlined the 10 steps we took to pay off our $195,000 mortgage in less than 4 years.

10 Steps to Paying Off Your Mortgage in 4 Years

We were intentional, determined and ready to do something incredible for our family.

1. Start With a “Why”

When I’m about to complete any difficult challenge, I always try to think about the “Why” before the “How”. “Why” do I want to do this? That way, I can always refer back to my “Why” throughout the difficult process to keep me motivated.

So for me, my “why” for paying off the mortgage was about reducing the stress that comes with having a big mortgage and only one source of income. I constantly felt pressure at work to not mess up because if I did, we could lose our house!

With two little kids at home, I went into “Papa Bear Protection Mode”. Given that I’m a personal finance nerd, this was the best way I could protect them.

That was my “Why”. If you’re considering something big like this, I’d recommend starting with a “Why” as well. (And then nurturing it every step of the way.)

2. 15-Year Fixed Rate Mortgage

We chose a 15-year mortgage when we bought our new home. This made our monthly payments higher overall (versus a 30-year mortgage), but more of the payment was going to the principal each month.

By choosing a 15-year, we were also forcing ourselves to make larger principal payments. With a 30-year mortgage, we could decide to pay more or pay less principal depending on the month. We didn’t want that option. We wanted it to be gone fast!

Last but not least, our mortgage interest rate was only 3% with the 15-year mortgage versus a quoted 4% on a 30-year mortgage.

We saved $92,752 in interest by going with a 15 year mortgage vs a 30

We chose to pay less to the bank and keep more for ourselves. If we went full term, we would have paid $92,752 more in interest to the bank! No thank you, Mr. Banker.

Jackie’s note: If you’re curious about how quickly you could pay off your house or other debts, check out the Pay Off Debt app. It might be quicker than you think.

3. Mortgage Payment No More Than 25% of Take Home Pay

With my first bachelor pad in 2004, I had a mortgage that was about 60% of my take home pay. Let’s just say I didn’t have a lot of money for important things like … oh ya know, food!

My first house folly in my 20’s is a hyperbolic example for more financially educated folks, but it stuck with me when we were looking for our next house. We wanted to be in our dream house for the next 30 years so our payment (principal, interest, taxes and insurance) needed be comfortable.

We made sure that our monthly mortgage payments did not exceed 25% of our take home pay. This allowed us to allocate the other 75% to other areas of our life like household expenses, food, transportation, entertainment, saving and investing.

In this example, if you take home $4,000 per month (after taxes), your mortgage payment shouldn’t be more than $1,000. Obviously, do what’s best for you and your family, but this is what worked for us.

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4. Commit and Set a Date

My wife Nicole and I came to agreement that we’d dial back our lifestyle and pay this mortgage off in less than 5 years.

This would require sacrifice on our part, but honestly we live in the most privileged country in the world. How much “sacrifice” are we really talking about here?

5. Live on 50% of Your Income

In 2011, we paid off $48,032 of consumer debt. Since that time, we’ve consistently lived on about 50% of our income. There have been years when we’ve spent more and years where we’ve saved more. On average, we’ve been a couple who saves around half and spends around half.

In order to pay off the mortgage in less than 5 years, we knew we needed to continue this 50/50 path. We had prepared ourselves for this reality and it wasn’t bad when we were both employed. When Nicole and I decided that she’d leave her job and stay at home with our two kids in 2014, the story changed a bit.

Here are 5 things we did to trim our expenses further:

  1. Decrease our grocery spending by ⅓ (Aldi rocks!)
  2. Cut the cord on cable (think HD Antenna)
  3. Embrace all the free and inexpensive things to do with kids (library time)
  4. Negotiate our cable and cell phone bills (can I speak to customer retention please?)
  5. Take advantage of higher deductible insurance plans if you have a hefty emergency fund

6. Increase Your Income

Even with all of our cord cutting and grocery trimming, it was getting a little tight for us to live on one income and still pay this mortgage off in less than 5 years. And after all, you can only cut back so much. With income on the other hand … the sky’s the limit!

We did the the following things to increase our average household income over the past few years, which ended up being between $150k-$180k during our mortgage pay down process:

Sell Stuff Around the House

Clothes, electronics, unused gift cards, purses, bikes and even my prize moped was sold (it was time … I hadn’t driven it in a year).

It’s truly amazing how much STUFF we accumulated in our house that we didn’t need or didn’t bring us joy. Turn the trash into cash, right?

Bye-bye, moped & hello, mortgage freedom!
Bye-bye, moped & hello, mortgage freedom!

Kick A** at Work

I’m in sales. If I crush my goals, then I can be rewarded with a bonus. I went into overdrive for the last couple of years and it paid.

Start a Blog

In 2016, I started a blog and podcast that chronicled our families path to mortgage debt freedom. I’ve been able to help people on a similar journey and make some money while doing it.

7. Budget Monthly With Your Spouse

Lucky number 7 here is probably the most important success in my eyes. The collaboration that my wife and I had over the past 4 years has been incredible. I’m so proud to be married to Nicole. She’s a true partner.

Okay, enough lovey dovey … Get to the details, Andy!

On the first day of every month since 2012, Nicole and I have used Mint to plan out our household budget. We review our spending from the previous month, allocate our dollars for the current month and review our goals for the future.

We dub this meeting our “Budget Party”. Well, I called it that originally to get Nicole excited about joining me. I added in pizza, beer and wine to the “party” but she saw right through me and my marketing tactics.

She eventually joined the “party” after some gentle nudging. Today, she’s the one keeping me on task!

The budget we create together is a “zero-based budget”. (Get a free zero based budget template here.) This means that every dollar we have has a job. For example, if we have a $4,000 monthly income, all 4,000 of those dollars will be allocated to spending, saving, investing, etc. If we didn’t tell those dollars where to go, they’d magically float away. You know what I’m talking about, right?

If you’re more into spreadsheets than a system like Mint, I’d recommend Tiller (affiliate link). Nicole and I are trying it out lately and really enjoying the flexibility.

8. Remember to Have Fun…But Be Careful

With our tighter mortgage crushing budget, we didn’t have a lot allocated for fun … especially vacations. We decided that we’d take advantage of travel rewards for some free or inexpensive travel. Between my work travels and our responsible credit card usage, we were banking some solid travel rewards.

In 2016, we traveled to New York for a romantic getaway weekend on travel rewards. Flights and hotel would have cost us $1,500. We paid $0.

In 2017, we traveled to Ft. Lauderdale for our anniversary. Yep, travel rewards paid for that one as well.

Nicole & Andy enjoying Florida
Nicole & Andy enjoying Florida

Next year, we’re planning on taking our family of four to Disneyland for a whooping $220.

I’m not saying that using credit cards is for everyone. CREDIT CARDS CAN BE DANGEROUS AND CAN RUIN YOU FINANCIALLY. NerdWallet reports that the average US household that carries credit card debt has a balance of $15,654.

For those who can live on a consistent monthly budget and are extremely responsible with their money, they might as well enjoy the perks that come from credit cards. If you consistently carry a credit card balance and have trouble making your payments, I’d highly recommend paying with cash or a debit card. (Jackie’s note: Definitely do not use credit cards for rewards if you’re in that situation.)

9. Celebrate the Wins

Four years is a long time to wait for a big goal. We decided to celebrate along the way.

When we went below $100,000 in our mortgage balance, Nicole and I went out to a nice dinner to celebrate. We ate at our favorite restaurant and enjoyed some champagne to commemorate this milestone in on our journey.

And on the big mortgage pay off day, our family of four went to the bank together. We took a picture as a family and went to a local diner to celebrate. My 3-year old had an epic meltdown in the restaurant because his jacket wouldn’t zip, but hey, not everything can have a storybook ending!

We'll take one check and two Jolly Ranchers from the free candy dish please
We’ll take one final mortgage payment check and two Jolly Ranchers from the free candy dish please

10. Dream About the Future

Now that the mortgage is gone, we’re setting our sights on the future. We’ll have around $35,000 extra each year to allocate.

  • Can our kids go to college and not go into debt?
  • Should we start a family business?
  • Can we go on guilt-free vacations each year?

We don’t have all of the answers quite yet, but we’re really enjoying planning out our next steps. For now, we’re saving up our money so we can make the best decisions for our family’s future.

What I do know is that my stress level at work has decreased significantly. I can confidently say, “No one will ever take away our house.” To be able to say that has definitely made the “Papa Bear” in me quite proud.

Did you find this story inspiring? Save it to Pinterest to share it with others!

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Wow, if they can do it maybe I can too! How this family paid off their $195,000 mortgage in 4 years.

33 thoughts on “How We Paid Off Our $195,000 Mortgage in Less Than 4 Years

  1. Congratulations! That should feel great.
    Do let us know what you do with all the extra money.

    We are trying to pay off our mortgage too, and we don’t have any other debt. However, that is only part of the plan. We are trying to retire early in another 5 years or so. Paying off the mortgage is part of that plan.

    1. We’re in the same boat! We would love to retire in 5 years as well. Buy-and-hold rental real estate is our current plan. Buy 1 house per year for 5 years. Retire and smile 😃

      1. This is so wonderful! We have 220k left on our mortgage and a 5 year plan to pay it off. We have a similar why. My husband I s the only one working and basically we want more flexibility and the ability him to possibly have a lower paying job in the future or end goal of retirement sounds AMAZING! I worry about health insurance for a family of 4. Has anyone crunched the numbers on that end?

      2. Health insurance is going to depend a lot on where you are and what the options are like in the future. *Sometimes* you can also get insurance even from lower paying, more flexible jobs. In short, it’s going to vary a lot. Some options to consider in general though are the healthcare marketplace (, group options if you qualify for any, and healthcare sharing ministries (although those aren’t technically insurance and don’t always accept everyone.)

      3. Inspiring definitely. I have 50 k left on my mortgage and if you guys did it I know I can. Thanks for all the tips.

      1. Can you break the numbers down for me to understand, thank you, congratulations

  2. EXCELLENT! I am so proud of your entire family! I am sure this took sacrifice from everyone in the family. Ya’ll are going to make it as a couple, in fact you already have. Your story is truly inspirational!!!! Now, a little bit about me. It was so refreshing to read about happy news instead of sad news. Well, this may not come as a shock that I was born in Georgia, currently living in Alabama. I am divorced and have custody of my two grandsons for 11 years now. No boyfriend, small family, little support system. The boys were 5 years old and 4 months old when I got them, now they are 16 and 11. BTY, did I mention I take care of my aging mother also. My background is LPN (nurse) for 25 years, clerical prior to that. I took disability in 2012 due to chronic back pain, arthritis and some other problems. My older grandson will graduate high school next year and we are doing fine. I have to pull a rabbit out of my hat on occasion, but I know I am preaching to the choir! Thank you for sharing your lovely story! I will be 65 January 19th.

  3. Love the pinata and it’s a great way to get the children involved. We might try this idea with ours in a couple years when we become mortgage-free!

    We also gota 15-year mortgage to motivate us to get out of debt sooner rather than later. And, we were in a financial position to afford the higher monthly payments.

    1. I’m so glad to hear you have a plan to become mortgage free! When that big debt is out of your life, you’re going to love it. Let me know if you want the details on how to make the piñata!

  4. Your math does not add up. 4 years is 48 months. You say your take home pay is $4k. 195000 divided by 48 is $4062. Did you use every single penny you had to pay off your mortgage? Then what did you eat, what car did you drive, etc? Not trying to be a downer, but if you are going to post about it, the math has to work, right?

    1. Hi Nate, Andy didn’t say what his take home pay was. He just said that they made sure their monthly mortgage payments didn’t exceed 25% of their take home pay when they bought the house. The $4,000 per month he mentioned was an example: “In this example, if you take home $4,000 per month (after taxes), your mortgage payment shouldn’t be more than $1,000.”

    2. He said he was in sales and rewarded bonuses…. He crushed it… He also said “if” your monthly income is 4000….. We don’t know his income.

    3. People need to read and stop thinking that they’re smarter than this guy. He said he earned $150-180K during the mortgage payoff. After paying himself first through Investments which anybody with half a financial brain does, he probably had $53-63K, approximately half of his married with children take-home. He paid bills after his wife stopped working which is unknown how much that contributed to the mortgage reduction. He clearly performed at work and maximized his earning potential at $180k to pay the $4316 monthly average mortgage payment which probably left him with $500 a week for everything else. If he lived like a pauper scratching and clawing his way to a positive end financial result for his family with tons of mental effort and determination this was extremely possible! People commenting negatively don’t have his heart. When you grow a heart you can accomplish the toughest tasks!

  5. Wonderful, my mortgage balance is $118,000 and I would like to pay it off and retire in 4 years.
    I am thinking on “doubling up” on my monthly payments.

  6. Do you have an example how to do this? Do you need to call th mortgage company and tell them to ‘ ‘ only apply to the Principal”, so that they dont apply to the interest, or what?

    1. For your extra payments (above your normal mortgage payment) it depends on how the lender lets you make them. In some cases you need to send in a check, in which case you’d mark the memo field as being “for principal only”. Sometimes you can do it online, and check the box that specifies that. Other times you do need to call.

  7. did you guys put any money into retirement accounts like a 401k while you where doing this or did you strictly just dump money on the mortgage.

  8. How do you figure you’ll pocket an extra $35,000 each year by paying off your mortgage early? A 15 year $195k mortgage at 3% APR equates to a mortgage payment of $1,346 per month. $1,346 multiplied by 12 months is $16,152 per year, not $35,000.

    1. That is true. I was also factoring in the extra principal payments I was making on top of the mortgage. I hope that helps clarify things.

  9. I guess I am just curious about how to get a mortgage loan that does not penalize for early payment. I keep seeing/hearing that banks will have it built into the contract that you pay a % penalty for this to ensure they profit from the loan.

    1. I haven’t gotten a mortgage in a long time myself, so I don’t know how common it is for there to be prepayment penalties in mortgages now. It used to be more something to watch out for, and to check that yours doesn’t have it ahead of time. (Or at least to know how much it would be if there is one.) Hopefully it’s still not horribly common, because mortgage holders are definitely profiting from the loan, plus there can be origination fees, etc. that they make money on. To answer your question though, it’s just something to check when shopping for a mortgage and making comparisons. You can use a mortgage broker, shop around on your own, etc.

    2. I was wondering the same thing. I know my parents went to pay off their first home (a rental now) and they were told they would have to pay an early payment penalty. They were not expecting that. They held off for a bit and I’m not sure if or when they will be able to pay it off.

      I paid off my truck and was worried about the same thing but luckily there was no issue.

  10. I see a monthly budget (below) that you used, and while you clearly accomplished what was claimed, a couple areas are a bit perplexing.

    Most notably:
    1) There does not appear to be any reconciliation. Putting “planned spending” into categories is all good and well, but unless you actually reconcile your plan with actual spending, it doesn’t do much. If on the other hand, this was after-the-fact categorizing, then what was the forward plan?

    2) $50 month for baby supplies for 2 kids, one of whom appears to be in diapers is, well, a tough sell. That category is highly suspect.

    3) Rounding to $50 is an odd choice for reconciling. For front planning, that makes sense, but again, I’d be perplexed how one would possibly execute on this plan (the key to budgeting is to compare actual spending with the goal set at the beginning of the month)

    4) toiletries at $50/mo is pretty surprisingly low.

    5) you apparently have no life insurance, no car insurance, no out-of-pocket medical costs and vehicle maintenance less than 50% of the national average.

    6) You have no other miscellaneous category so I presume you don’t wear makeup, use hair products, get haircuts, etc. unless those are covered under toiletries, in which case I presume you use your left under for wiping (since there is no money left for tp)?

  11. I would love to know more about how the food budget was managed. My wife is also a stay at home mom, we have two daughters, almost four and almost two years of age.

    What we struggle with is eating too much fast food. How did you manage this? Did you guys both cook, or was it more the responsibility of one person? Or did you mostly eat out?

    I work 60 hours a week, so it can be hard for me to find the energy to prepare food for work and after work every day.

    Any details or suggestions here would be awesome!

    1. My guess is that he only used 4k as an example to simplify his illustration of the 25% mortgage payment limit he was talking about. But I was also wondering about his income level to be able to afford extra mortgage payments and basic expenses on a 1-income, 4-person household. I understand wanting some financial privacy; however, if other people such as myself would like to go beyond being inspired and actually apply the “10 steps”, I have to know how to adapt and adjust my own unique income sources, location, and expenses to have similar successes. Otherwise, these type of stories are just feel-good clickbaits to get ad revenues and/or sell products, and can actually be discouraging to people who are truly hardworking yet do not have similar results because they don’t earn as much.

  12. Most impressive thing about this is needing a budget to accomplish this.

    Using the lowest income you provided at 150,000 assuming your company doesn’t provide worse healthcare than mine that pays significantly less. We can do some rough math here with vague numbers and making assumptions.

    It would be between 9600 and 11000 per year for health insurance for a family of 4. This is typically pretax amounts and also reduces the tax burden on your income.

    Lets also assume at a minimum you are placing ~15% of your income to 401k that would be around 22,500 every year.

    That would leave taxable income around the 115,000-120,000 range.

    After taxes you’d owe would leave you around 90,000-98,000 or ~8000/m you mentioned no more than 25% of your income so this number actually fits. Because from your SS you paid~2000/month to your mortgage.

    So after the mortgage you’re left with 6k to work with every month, I get that having a family has cost associated with it but this could have been accomplished with no real huge sacrifices.

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