Actually, this milestone was already achieved a few years ago.
I had long awaited the final payment on our house for a years, and it finally happened 6 years ago, just a month before the COVID pandemic started.
This was February of 2020.
We lived in a one-and-a-half-story bungalow lot, 60 by 80 feet of landed property, located 30 minutes drive from the city center. Location was not ideal, but the house was comfortable, bright, communally designed, and it fit our growing family. Kids loved the grounds to play and run on, and I loved the open concept design and the natural lighting of the house.
I had imagined coming home from the lawyer’s office with the official house deed documents, having our names stated as the legal and only owners of the house.
No longer owned by the bank, but ours.
Not to be dramatic, but in my head, I’d imagine that I would plant a homemade flag on our grounds, and then roll around the grassy yard knowing that the property is finally ours and we need not make any more payments to the bank.
Unfortunately, I couldn’t do that for two reasons.
One reason was that I was heavily pregnant with my third child, about 8 months along then.
And another reason was that we had a large golden retriever living with us and there were poop bombs in random locations on the grass.
So I did it in my head, and enjoyed a quiet lunch date with my husband instead.
But the feeling that the home was ours and that we need not worry about losing our home in the event we had a family emergency or loss of income, was wonderful.
It felt pretty good, I must say.
I felt freedom and relief for having a major financial burden lifted off our shoulders. Our household savings increased after that since we stopped monthly mortgage installment payments.
It may not be the best investment choice for others, but being a low-risk appetite person and one who has some level of anxiety, this was the better choice for us. We had young kids, and we both worked at the same company, stable though our work was.
I’m aware the money could have been invested instead and grown over the years, but each family will need to decide what works best for them, and we chose one that makes us enjoy our years better now, when we are younger and have our kids with us in the same home.
And when the pandemic hit our shores over a month later, and people were losing jobs and earning less, the choice we had made gave me a better sense of security. I had given birth by then and was on maternity leave, and I saw how worried people were then about money and expenses.
A few factors helped us, and one of them was that the house was purchased at a much lower cost than most freehold landed homes today, due to the distance from town.
The place we lived was near palm tree plantations back then, and even the developer then was unsure if it would sell well. Since then our neighbourhood had developed and other new housing and shops, and highways had opened around us, with house prices in the last few years doubling what we paid in 2009.
Another was that we made additional payments every month to cut down on the interest accumulation and to make the repayment period end earlier. We also did one-off payment chunks in the final years leading up to the full repayment.
It took us a total of ten and a half years to pay it off, from 2010 when the house was constructed, till we moved into the house in 2013, and then we made the final payment in early 2020.
We have lived here now close to 13 years, and here we built our marriage, careers, and we had brought our kids home to this place after their births.
We had barbeques, fireworks, pool parties, and family and friends over when we could.
The equity remains in our home, whether we choose to sell or rent it out. If we do move houses in the future, depending on our family’s needs, this home will still be ours, and it holds a sentimental value in my heart.
How many years of repayment do you have left on your mortgage? And would you also plan to repay your mortgage earlier than the loan duration?
I had written an earlier piece on the same topic years ago (and apparently had forgotten about it), today we had reimbursed to EPF account 2 all that we had taken out during those years for the early repayment of the loan. In case you wanted to read my thoughts in it from 4-5 years ago, below is the link:
https://beccawritesatnight.com/2021/12/12/we-paid-off-our-house-loan-early-and-have-no-regrets/