What strategy would YOU recommend to pay off a mortgage early? Check out the Pay Off Mortgage Early Template here ➡ www.gabrielletalksmoney.com/product-page/pay-off-mortgage-early-template
Hi Gabrielle I just found your site today and I’m so glad I did. You have some very helpful content. Thank you 🙏. I bought your pay off your mortgage template today and couple questions. I pay my mortgage biweekly already and have an increased biweekly payment arranged with the bank already. How do I enter my information to give me correct answers being biweekly already ? Also I entered my monthly expense as the increased payment amount I already have set up with my bank. Ie $563 increase to $700 so I said $1400 a month with an amortization of 14.9 years because that is what it is with the increased payment I have set up as autopay with my bank. Is this giving me correct numbers how I’ve entered things ? Appreciate any direction you can offer
We refied (11% to 8%) and then as our salaries increased started making additional payments that got applied 100% to the principal. Paid off the 30-year mortgage in a little over 11 years.
I am doing all 3 strategies! $1400 extra monthly lumpsum, regular weekly payments. and just recently increased my weekly amount by extra 18 dollars lol.
SO every month on a certain day you pay $1400 on the principal? How much do you pay weekly? Just curious because I want to do this with my home and my car loan.
So keen! My wife and I are 50k additional so far over 2 years and updated it again to 1k a week fortnightly recurring and the calculator says around 7-8 years until $0 😮 gives me so much motivation to keep smashing it out
This is a very analytical accountant take, which I appreciate. However sometimes the more advantageous scenario isn't to pay off your mortgage early; Its to take the payments that you would have otherwise used to pay down principal and invest it into an ETF like VOO or SPY and within 25 years that money over the time would essentially be much higher than your starting balance.
It deppends on how tou feel about it, for me also an Accountant the best feeling was also to payoff my house and get rid of the those interest payments. Now we can focus on investing and saving and traveling.
Started overpaying my principal when the 1st was due in early summer 21, knocked years off the life of the mortgage in almost 3 1/2 years also every COLA we add another $10 a month to the payment, This Jan 25, we will be paying $50 more on a $126 a month principal, we have been paying far more towards in principal than interest for awhile now.
Nice video! I was paying more into principal every month when my loan was at 4.25% but once I got it refinanced to 2.75% I pulled back most of that cash and put it into total market ETFs.
I have been investing in QQQ for 22 years with an annual rate of return of 14.4%. The 8k I put in 2002 is today worth 150k. Using your example, imagine not paying down the 5% mortgage faster and instead putting that towards an investment like the QQQ. You would think you saved a few hundred thousand dollars in interest, but you would actually give up millions in stocks appreciation.
true. and sacrifice more like. Live like dogs, work like slaves and have no free lives to enjoy or grow. The market itself is 200% overpriced. letting the price fall would solve all miseries. but .. they dont talk about reducing the price, increasing the supply. they just advises ..for eating less, wearing less, working more, spending time with family less.
It really depends on your interest rates and if you can get better return from your extra money. Then you can decide paying off your mortgage early really making sense.
I explained to my 8 year-old daughter the difference between the avg yearly appreciation of our home versus the cost of the money loaned to us. Based on 30 year avg, we would lose money if interest is above 5-6% and gain money if it is below. Most years, you will earn money on real estate. Having a mortgage isn't a bad thing as long as you are making good decisions with your money. Having a home repossessed or being house poor is a lot worse. Gabrielle has lots of great ideas on those risks and how to avoid those financial pitfalls. First National has an option of upping pymt by 15%: we have probably used this option the most.
Great template . I agree with the previous comments. Would be great to get additional simulations to see the effects if we had 2 or all the 3 strategies . Maybe a future video ?
Great video I don’t think people realize what they’re paying and how much they’re paying over the long run. I personally am doing a biweekly payment with an additional monthly payment for principal.. ❤.
Well done! I could have used the spreadsheet model you created and ended up creating my own years ago, but I like how you added graphing and round functions in Excel. I am going to share this with others who could leverage this advice to plan their mortgage payments via scenarios models. Also second the comment about the weekly option, and perhaps how "accelerated weekly" and "accelerated bi-weekly" options impacts the overall interest paid over time. Another lens for you - is the ability to project a bit further based on 5, 10, 15 year mortgage renewal intervals, I think in some cases people don't model what an interest change impact might look like. Thank you for creating this video!
Hi Gabrielle... Thanks for the video. Very informative. You have highlighted the HUGH amount of interest that we've been paying for our mortgage loan. This will really cause us to consider ways to pay less interest to the bank so that we can use that amount for better use. Thanks for sharing and your explanation is really clear and easy to understand for people who have little financial knowledge.
If you make a lump sum payment you can consider recasting your mortgage at the same time. Recasting will reduce the interest and principle of future payments. However, you should continue to pay the original payment plus additional principle to pay off your loan early.
@@akunamatata4266 When recasting you make a large lump sum payment. Then mortgage company can recalculate your remaining installments as if you made a larger down payment from the beginning of your loan.
Great video! Thanks for breaking down the scenarios and even showing that there's no one true strategy to pay down your mortgage quicker. I'll definitely use this to determine when I own a certain % of my home and when I can stop paying private mortgage insurance. Definitely subscribing for more of this type of content :)
@Lennoxrenol great information and video What if I can show you another way to achieve the same goal in less time using no additional income or payments
Gabrielle, I hear from people with a lot of money that they would choose to pay a mortgage over buying a house with cash(one payment) so that they can get a tax write-off. Can you compare the benefits of paying off a mortgage early versus getting a tax write-off? I'm in the US.
Purchase (2) modest investment rentals. (I own 4.) It is a part-time hands-on business and a ticket to a comfortable retirement if you are willing to deal with the headaches. I buy clean low-mileage cars in cash and I carry no balance on credit cards. I "retired" 10 years ago and my portfolio is worth more now (inflation considered). I will not outlive my resources if I live to be 100.
Like someone else said, it depends on your mortgage interest rate and whether you can get better return investing elsewhere. It’s not always the best idea across the board. We had a 3% interest mortgage that we paid off in 8 years. Value of the house went up 60% during that time. In hindsight we probably would have made more money investing elsewhere bc we had a low interest rate and stocks were doing so well during that time. And we can’t buy rental properties or stocks now bc they are so high.
I’m closing in on my retirement and I’d like to move from Minnesota to a warmer climate, but the prices on homes are stupidly ridiculous and Mortgage prices has been skyrocketing on a roll(currently over 7%) do I just invest my spare cash into stock and wait for a housing crash or should I go ahead to buy a home anyways?
If anything, it'll get worse. Very soon, affordable housing will no longer be affordable. So anything anyone want to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.
Considering the present situation, diversifying by shifting investments from real estate to financial markets or gold is recommended, despite potential future home price drops. Given prevailing mortgage rates and economic uncertainty, this move is prudent, particularly due to stricter mortgage regulations. Seeking advice from a knowledgeable independent financial advisor is advisable for those seeking guidance.
This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800,000.
@@joshbarney114 I appreciate the implementation of ideas and strategies that result to unmeasurable progress. Being heavily liquid, I'd rather not reinvent the wheel, thus the search for a reputable advisor, mind sharing info of this person guiding you please?
Finding financial advisors like Marisa Breton Dollard who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
The purpose of taking out a loan is not to save money. It’s so you can live comfortably month by month. If you wanted to save money it would make more sense to save up first and pay in cash w 0 interest. Paying more per month will save u money but it’s also reducing the comfort of ur life bc that’s money taken from other areas of ur life.
I would say I don’t know how I find you on TH-cam, but I know better. My husband and I have been in prayer so that we get our credit scores up and our credit record in great shape so that we can purchase our forever home. It was no one but God that led me to *Pecuniary backdoors* . I thank God for this wisdom. Bless you.
Does this make sense with a lower 2.5% interest rate loan? Wouldn’t I make more investing this vs the amount I save in interest? Is it straight forward as knowing that I can expect 4.5% in HYSA or 8% from the SP500 if I invested the $200/mo in either of those options?
Numbers are there, but imagine losing your job or having a tragic life event. If you do this and lose 2 lbs every week. But somehow I just see a bunch of fat people.
instead of paying off mortgage early. Why not invest extra cash on investments l(e.g. stocks) with higher than 4-5% ( interest rate) return? i don't mean using Smith Manuveur but simply invest and reinvest
Great video! If I am making extra payments every month, do I have to let the lender know ? Or the interests charged is automatically recalculated? (I had to ask for recast in order to reduce the monthly payment )
If S&P 500 averaging 8% growth per year (this year already 20%), and your house appreciates by 5% per year, then your asset growths faster than your mortgage. So if you want to downsize when you retire, your home will be worth more than double. If your house appreciates, then you can leverage it to buy another house and rent out one of the houses. So long story short is to discuss with your financial advisor. It isn't always wise to pay off your mortgage.
Hi Gabrielle, love your video about finances. Can you do a video on how you choose Accounting as a career and how you study for the courses. Currently am an accounting study and not sure if I’m into audits or tax. Advice is appreciated.
don't have a house yet, but looking soon and plan to go for a 15 year mortgage instead to really save on interest and then I;ll apply one of these strategies too so hopefully I can be done in more like 10 years cause then my kids will be in college and I'd love to help them
Thank you *Strategic techies* so much for you’re advice as my credit score is 771 and wanting to increase it as much as possible as l’m just trying to look out for my future. I’ve subbed you.
My brother, you needed this! I already had ideas of raising my score. But I just found more ways because of this. *Pecuniary backdoors* are such a blessing, keep going frl!
If you took that lump sum of $20k and put it in a HYSA account then pulled $1666,00 a month to put on your mortgage you would end up better off correct?
Because a mortgage’s interest is front loaded would it be wise to double pay the first 1/3. Pay 50% extra on the 2/3 and regular payments on the last third? Giving me more capital in invest in years 10-30 in a 30 year mortgage?
Biggest lesson i learnt in 2023 in the stock market is that nobody knows what is going to happen next, so practice some humility and low a strategy with a long term edge.
Nobody knows anything; You need to create your own process, manage risk, and stick to the plan, through thick or thin, While also continuously learning from mistakes and improving.
Thank you for this informative video, Gabrielle! Question: My mortgage is 5.0% Fixed on 400k loan - Even though I pay principal, my interest won't deduct until the 3 year period? or do I understand this incorrectly? So, would it be better to save money for 3 years and pay when the mortgage opens? because the interest won't decrease even if I pay now until the mortgage reopens Thanks!
When it comes to a lump sum payment, do you know why it is limited per year? That makes no sense lol Is it because the bank wants to keep the money coming in as revenue/income?
It's to ensure they profit from the mandatory interest paid, more predictable for the lender. Usually it's a 5 year term, and you can pay up to 20% per year of that term but those numbers vary from lender to lender.
Gabrielle Thank you very much for your sharing ❤ Is really usable ! But how can we talk to the bank if I Want to change pay off Mortge early ? I m the payment ? Because my Mortage just start about 1 Yr ? Is it possible to change mine is 5 yrs fixed turns Pls teach me thank you
Thank you *Strategic techies* so much for you’re advice as my credit score is 771 and wanting to increase it as much as possible as l’m just trying to look out for my future. I’ve subbed you.
My brother, you needed this! I already had ideas of raising my score. But I just found more ways because of this. *Pecuniary backdoors* are such a blessing, keep going frl!
What if you put down 20% and make $400 additional principal payments (2 out of the 3 options) would that be more beneficial than just the additional principal payments?
Thank you *Strategic techies* so much for you’re advice as my credit score is 771 and wanting to increase it as much as possible as l’m just trying to look out for my future. I’ve subbed you.
My brother, you needed this! I already had ideas of raising my score. But I just found more ways because of this. *Pecuniary backdoors* are such a blessing, keep going frl!
There are plenty of reasons why you may want to put less or more. This also depends on where you live as fees and other things may be different than in Canada where she and I live. But if you are talking about a minimum you should put down in terms of saving on interest and fees, in Canada , if you put 20% down you can avoid paying for default insurance. If you have less than 20% down, this insurance costs around 2% to 4%. This is tired based on the percent you put down. The minimum I recommend is 10%. This is when the default insurance fee starts to decrease.
I’m confused between Scenario 1 and 2. If I go with Scenario 2, Am I only paying $2400 annually towards the principal vs Scenario 1 - 20k towards principal, meaning Scenario 1 would’ve been a better choice?
My brother, you needed this! I already had ideas of raising my score. But I just found more ways because of this. *Pecuniary backdoors* are such a blessing, keep going frl!
Thank you *Strategic techies* so much for you’re advice as my credit score is 771 and wanting to increase it as much as possible as l’m just trying to look out for my future. I’ve subbed you.
2.5% interest changes the dynamic though, isn’t it? If we are better off earning lot more than 2.5% in the market, it is best to delay the payoff as much as possible.
Thank you *Strategic techies* so much for you’re advice as my credit score is 771 and wanting to increase it as much as possible as l’m just trying to look out for my future. I’ve subbed you.
My brother, you needed this! I already had ideas of raising my score. But I just found more ways because of this. *Pecuniary backdoors* are such a blessing, keep going frl!
do you have a scenario where the extra $200 mortgage payment is put towards mutual funds at 7% or stocks at 10% annual gain. I was thinking to accelerate my mortgage as well but caught with this conundrum.
I would say I don’t know how I find you on TH-cam, but I know better. My husband and I have been in prayer so that we get our credit scores up and our credit record in great shape so that we can purchase our forever home. It was no one but God that led me to *Pecuniary backdoors* . I thank God for this wisdom. Bless you.
I would say I don’t know how I find you on TH-cam, but I know better. My husband and I have been in prayer so that we get our credit scores up and our credit record in great shape so that we can purchase our forever home. It was no one but God that led me to *Pecuniary backdoors* . I thank God for this wisdom. Bless you.
I do bi weekly payments, however I never thought I could pay a bit more on the principle. I’m in Canada, can you setup extra payments/higher payments at anytime or do I need to wait for renewal time?
It’s either the same of close enough to get you within a few percent. She may be doing a compounding interest calculation here whereas loans are almost always not compounding.
Great video and food for thought. Can I ask please what was the costs reductions if we paid the 20% lump sum $8000 start of each year 1, then again a 20% start of year 2, year 3 etc wouldn't that drastically affect the interest and total term against Scenario 2 bi weekly?
I would say I don’t know how I find you on TH-cam, but I know better. My husband and I have been in prayer so that we get our credit scores up and our credit record in great shape so that we can purchase our forever home. It was no one but God that led me to *Pecuniary backdoors* . I thank God for this wisdom. Bless you.
My brother, you needed this! I already had ideas of raising my score. But I just found more ways because of this. *Pecuniary backdoors* are such a blessing, keep going frl!
Thank you *Strategic techies* so much for you’re advice as my credit score is 771 and wanting to increase it as much as possible as l’m just trying to look out for my future. I’ve subbed you.
Thanks for the video! By setting up the extra payment to go towards principal, does that mean I need to contact the bank and mention that any extra payment I want it to paying off the principal? Can you please shed more light on this? I wish you can make a course for CPA Students, that would be very helpful for me. - Just a thought :)
You should definitely contact your bank. My bank allows me to choose “principal” or “regular payment” for any additional payment I make online but if I don’t specify principal it just looks like I’m trying to make my mortgage payment early so I had that happen the first time I did it (they applied the extra payment to the next month’s mortgage payment and I had to call and have it fixed.
Hey Miss Gabrielle, if am to take Biweekly payment, does this mean I have to get my monthly payments and Divid it by tow. {paying half of my monthly payment on the 1st of the month and another half on the 15th of the month. Please Guide me thanks 🙏
Again my monthly payment of $2,436.07 this is part of the principal and interest that’s my monthly payment I guess it’s the one you said about but some has to divid it into to equal payments
The best way of getting rid of interest payments is , by with cas no mortgage 😂 may be small property. But also remember if we pay back mortgage double in twenty years valu of money will also be depreciated to l half in twenty years. Not a big loss. On the other hand your home price will be 4 times in 25 years. You just paid down payments may be 20%, rest was bank money.
It’s actually only one extra payment because you are essentially paying two extra bi-weekly payments per year (There are only two months each year with 5 weeks instead of four) which equals only one extra monthly payment. Most people who pay monthly are making 12 payments (24 payments if you split that amount into weekly payments) Paying biweekly results in 26 payments so two additional half payments = 1 extra mortgage payment Hope this makes sense 😊
Your life was never yours to begin with thats usa for ya. ID, social security right when you born 😄. Its just the land thats not yours. Just gotta move your paid off house off from their property
I would say I don’t know how I find you on TH-cam, but I know better. My husband and I have been in prayer so that we get our credit scores up and our credit record in great shape so that we can purchase our forever home. It was no one but God that led me to *Pecuniary backdoors* . I thank God for this wisdom. Bless you.
My brother, you needed this! I already had ideas of raising my score. But I just found more ways because of this. *Pecuniary backdoors* are such a blessing, keep going frl!
Thank you *Strategic techies* so much for you’re advice as my credit score is 771 and wanting to increase it as much as possible as l’m just trying to look out for my future. I’ve subbed you.
My brother, you needed this! I already had ideas of raising my score. But I just found more ways because of this. *Pecuniary backdoors* are such a blessing, keep going frl!
You did not include inflation, present value vs future value. Say a fixed 30 years payment of $2100 30 years from now is not the same value of $2100 now😁 so what you need to do is don’t pay extra on the payment but rather invest that money now to let your money to work for you and give you the best value.
Thank you *Strategic techies* so much for you’re advice as my credit score is 771 and wanting to increase it as much as possible as l’m just trying to look out for my future. I’ve subbed you.
Life events. Imagine having a paid off mortgage before you have kids. Or if you a loner, then it doesnt matter of you lose in the stock market or your house.
@@ychongy having kids wouldn’t make me want to be inefficient with my assets. If anything, having a family should make you want to be responsible and make better choices.
Thank you *Strategic techies* so much for you’re advice as my credit score is 771 and wanting to increase it as much as possible as l’m just trying to look out for my future. I’ve subbed you.
My brother, you needed this! I already had ideas of raising my score. But I just found more ways because of this. *Pecuniary backdoors* are such a blessing, keep going frl!
One lesson I've learnt from billionaires is to always put your money to work, and diversifying your investments. I'm planning to invest about $30k of my savings in stocks this year, and I hope I make profits.....
You are right. The best approach I feel is to diversify investments- by spreading investments across different asset classes like bonds, real estate, and international stocks, they can reduce the impact of a market meltdown.
Bi-weekly payments aren't a thing. They make no difference on your loans. This misinformation has been around for at least 20 years. If this was the case it would ve smart to just make the early payment instead of Bi-weekly payments to take more off. Again. If I pay my mortgage on the 15 instead of the 30th that has zero effect on your payments.
I would say I don’t know how I find you on TH-cam, but I know better. My husband and I have been in prayer so that we get our credit scores up and our credit record in great shape so that we can purchase our forever home. It was no one but God that led me to *Pecuniary backdoors* . I thank God for this wisdom. Bless you.
Lol. That isn’t what a biweekly payment is. What you are explaining is an accelerated biweekly payment payment (goes by other names as well) A true biweekly payment is the same annual amount as a monthly payment. In other words the monthly payment multiplied by 12 and then divided by 26. And he video is only useful if you have the money to do this. Most people unfortunately are dumb and max out their budget when buy things and will never have the ability to pay anything extra. And if someone has the ability to pay off anything near average mortgage in less than 10 years(as your thumbnail is saying) they would be better off investing. These “save money”, etc… channels are pretty much all just clueless people copy and pasting things they see online without understanding everything they are reading, and just give common sense advice. This is no different.
My brother, you needed this! I already had ideas of raising my score. But I just found more ways because of this. *Pecuniary backdoors* are such a blessing, keep going frl!
Thank you *Strategic techies* so much for you’re advice as my credit score is 771 and wanting to increase it as much as possible as l’m just trying to look out for my future. I’ve subbed you.
![โรงเรียนห้ามรัก โดนจับได้ตาย...!! [เอิร์นไดเม่]](http://i.ytimg.com/vi/4u02Sbr556Q/mqdefault.jpg)
What strategy would YOU recommend to pay off a mortgage early?
Check out the Pay Off Mortgage Early Template here ➡ www.gabrielletalksmoney.com/product-page/pay-off-mortgage-early-template
I want to purchase this, just checking if this spreadsheet comes as a google template or excel? Thanks
Hi Gabrielle I just found your site today and I’m so glad I did. You have some very helpful content. Thank you 🙏. I bought your pay off your mortgage template today and couple questions. I pay my mortgage biweekly already and have an increased biweekly payment arranged with the bank already. How do I enter my information to give me correct answers being biweekly already ? Also I entered my monthly expense as the increased payment amount I already have set up with my bank. Ie $563 increase to $700 so I said $1400 a month with an amortization of 14.9 years because that is what it is with the increased payment I have set up as autopay with my bank. Is this giving me correct numbers how I’ve entered things ? Appreciate any direction you can offer
Nah, not gonna pay my 4% interest mortgage early when the sp500 returns a historical average of 8-10%.
@@freefree1664there are free calculators out there.
We refied (11% to 8%) and then as our salaries increased started making additional payments that got applied 100% to the principal. Paid off the 30-year mortgage in a little over 11 years.
I am doing all 3 strategies! $1400 extra monthly lumpsum, regular weekly payments. and just recently increased my weekly amount by extra 18 dollars lol.
For each 18 dollars, it's less interest paid! Way to go!
SO every month on a certain day you pay $1400 on the principal? How much do you pay weekly? Just curious because I want to do this with my home and my car loan.
@@kimberlyhenninger6346 1400 on 1st of every month. and i do 548 weekly as my regular accelerated payments.
@ckshq48 great information and video
What if I can show you another way to achieve the same goal in less time using no additional income or payments
So keen! My wife and I are 50k additional so far over 2 years and updated it again to 1k a week fortnightly recurring and the calculator says around 7-8 years until $0 😮 gives me so much motivation to keep smashing it out
This is a very analytical accountant take, which I appreciate. However sometimes the more advantageous scenario isn't to pay off your mortgage early; Its to take the payments that you would have otherwise used to pay down principal and invest it into an ETF like VOO or SPY and within 25 years that money over the time would essentially be much higher than your starting balance.
It deppends on how tou feel about it, for me also an Accountant the best feeling was also to payoff my house and get rid of the those interest payments. Now we can focus on investing and saving and traveling.
Started overpaying my principal when the 1st was due in early summer 21, knocked years off the life of the mortgage in almost 3 1/2 years also every COLA we add another $10 a month to the payment, This Jan 25, we will be paying $50 more on a $126 a month principal, we have been paying far more towards in principal than interest for awhile now.
I wished you had shown the synergistic effects of using 2 strategies to see what it would look like. Still a fantastic and great video overall!
There are many calculators online that can do this for you.
Nice video! I was paying more into principal every month when my loan was at 4.25% but once I got it refinanced to 2.75% I pulled back most of that cash and put it into total market ETFs.
The bank let you refinance like that without a “reinvesting”?
@@AW-gj4ji No reinvesting. Just normal refinance and invested the money I earmarked for extra principal payments because the rate was so low.
I have been investing in QQQ for 22 years with an annual rate of return of 14.4%. The 8k I put in 2002 is today worth 150k. Using your example, imagine not paying down the 5% mortgage faster and instead putting that towards an investment like the QQQ. You would think you saved a few hundred thousand dollars in interest, but you would actually give up millions in stocks appreciation.
What’s qqq
Imagine doing that and having your mortgage paid off 😮
True. But then there is a risk element there that your investment DOESN’T pay off.
Each to their own, based on their own risk tolerance.
The secret no one wants you to know how to pay off mortgage early: SEND MORE MONEY! 😂
😂😂😂😂😂😂 right?!
true. and sacrifice more like. Live like dogs, work like slaves and have no free lives to enjoy or grow. The market itself is 200% overpriced. letting the price fall would solve all miseries. but .. they dont talk about reducing the price, increasing the supply. they just advises ..for eating less, wearing less, working more, spending time with family less.
It really depends on your interest rates and if you can get better return from your extra money. Then you can decide paying off your mortgage early really making sense.
Can you elaborate?
Awesome video just bought my house and have been making extra payments to the principal thanks
I explained to my 8 year-old daughter the difference between the avg yearly appreciation of our home versus the cost of the money loaned to us. Based on 30 year avg, we would lose money if interest is above 5-6% and gain money if it is below. Most years, you will earn money on real estate.
Having a mortgage isn't a bad thing as long as you are making good decisions with your money. Having a home repossessed or being house poor is a lot worse.
Gabrielle has lots of great ideas on those risks and how to avoid those financial pitfalls.
First National has an option of upping pymt by 15%: we have probably used this option the most.
Great template . I agree with the previous comments. Would be great to get additional simulations to see the effects if we had 2 or all the 3 strategies . Maybe a future video ?
Great video I don’t think people realize what they’re paying and how much they’re paying over the long run. I personally am doing a biweekly payment with an additional monthly payment for principal.. ❤.
Well done! I could have used the spreadsheet model you created and ended up creating my own years ago, but I like how you added graphing and round functions in Excel. I am going to share this with others who could leverage this advice to plan their mortgage payments via scenarios models. Also second the comment about the weekly option, and perhaps how "accelerated weekly" and "accelerated bi-weekly" options impacts the overall interest paid over time. Another lens for you - is the ability to project a bit further based on 5, 10, 15 year mortgage renewal intervals, I think in some cases people don't model what an interest change impact might look like. Thank you for creating this video!
Hi Gabrielle... Thanks for the video. Very informative. You have highlighted the HUGH amount of interest that we've been paying for our mortgage loan. This will really cause us to consider ways to pay less interest to the bank so that we can use that amount for better use. Thanks for sharing and your explanation is really clear and easy to understand for people who have little financial knowledge.
If you make a lump sum payment you can consider recasting your mortgage at the same time. Recasting will reduce the interest and principle of future payments. However, you should continue to pay the original payment plus additional principle to pay off your loan early.
What is recasting ?
@@akunamatata4266 When recasting you make a large lump sum payment. Then mortgage company can recalculate your remaining installments as if you made a larger down payment from the beginning of your loan.
Great video! Thanks for breaking down the scenarios and even showing that there's no one true strategy to pay down your mortgage quicker. I'll definitely use this to determine when I own a certain % of my home and when I can stop paying private mortgage insurance.
Definitely subscribing for more of this type of content :)
@Lennoxrenol great information and video
What if I can show you another way to achieve the same goal in less time using no additional income or payments
Gabrielle, I hear from people with a lot of money that they would choose to pay a mortgage over buying a house with cash(one payment) so that they can get a tax write-off. Can you compare the benefits of paying off a mortgage early versus getting a tax write-off? I'm in the US.
Purchase (2) modest investment rentals. (I own 4.) It is a part-time hands-on business and a ticket to a comfortable retirement if you are willing to deal with the headaches. I buy clean low-mileage cars in cash and I carry no balance on credit cards. I "retired" 10 years ago and my portfolio is worth more now (inflation considered). I will not outlive my resources if I live to be 100.
Like someone else said, it depends on your mortgage interest rate and whether you can get better return investing elsewhere. It’s not always the best idea across the board. We had a 3% interest mortgage that we paid off in 8 years. Value of the house went up 60% during that time. In hindsight we probably would have made more money investing elsewhere bc we had a low interest rate and stocks were doing so well during that time. And we can’t buy rental properties or stocks now bc they are so high.
You can buy rental properties with unpopular methods. How much do y'all have to invest?😊
What i got from this is, it's a good start to set up biweekly payments.
I can’t believe sometimes you can’t pay more then they would like you too or you get a penalty that’s insane to me!
Have you looked into how people say HELOC can help pay your house faster? What are the pros and cons using this strategy?
I’m closing in on my retirement and I’d like to move from Minnesota to a warmer climate, but the prices on homes are stupidly ridiculous and Mortgage prices has been skyrocketing on a roll(currently over 7%) do I just invest my spare cash into stock and wait for a housing crash or should I go ahead to buy a home anyways?
If anything, it'll get worse. Very soon, affordable housing will no longer be affordable. So anything anyone want to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.
Considering the present situation, diversifying by shifting investments from real estate to financial markets or gold is recommended, despite potential future home price drops. Given prevailing mortgage rates and economic uncertainty, this move is prudent, particularly due to stricter mortgage regulations. Seeking advice from a knowledgeable independent financial advisor is advisable for those seeking guidance.
This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800,000.
@@joshbarney114 I appreciate the implementation of ideas and strategies that result to unmeasurable progress. Being heavily liquid, I'd rather not reinvent the wheel, thus the search for a reputable advisor, mind sharing info of this person guiding you please?
Finding financial advisors like Marisa Breton Dollard who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
This is true. I finished my mortgage in 5.5 years! After that, my savings is increasing (like its in steroids) monthly 👍
Thank you!
The purpose of taking out a loan is not to save money. It’s so you can live comfortably month by month. If you wanted to save money it would make more sense to save up first and pay in cash w 0 interest. Paying more per month will save u money but it’s also reducing the comfort of ur life bc that’s money taken from other areas of ur life.
Loved this video and I will definitely be using your template.
I would say I don’t know how I find you on TH-cam, but I know better. My husband and I have been in prayer so that we get our credit scores up and our credit record in great shape so that we can purchase our forever home. It was no one but God that led me to *Pecuniary backdoors* . I thank God for this wisdom. Bless you.
*I’m glad it works for me and i am sure it will works for you as well*
Does this make sense with a lower 2.5% interest rate loan? Wouldn’t I make more investing this vs the amount I save in interest? Is it straight forward as knowing that I can expect 4.5% in HYSA or 8% from the SP500 if I invested the $200/mo in either of those options?
Numbers are there, but imagine losing your job or having a tragic life event. If you do this and lose 2 lbs every week. But somehow I just see a bunch of fat people.
instead of paying off mortgage early. Why not invest extra cash on investments l(e.g. stocks) with higher than 4-5% ( interest rate) return? i don't mean using Smith Manuveur but simply invest and reinvest
Love this info! I thought lump sum was better...in my situation additional monthly payments to principal are better! Thanks!
This was really good thank you for sharing the breakdown.
We are on track to pay our house off 2o yrs instead of 20. Which at the moment we have saved like 20k.
How much did you buy your house for?
awesome video and very well crafted spreadsheet!
Great video! If I am making extra payments every month, do I have to let the lender know ? Or the interests charged is automatically recalculated? (I had to ask for recast in order to reduce the monthly payment )
Would you recommend paying off the mortgage if the rate is less than 3 percent?
If S&P 500 averaging 8% growth per year (this year already 20%), and your house appreciates by 5% per year, then your asset growths faster than your mortgage. So if you want to downsize when you retire, your home will be worth more than double.
If your house appreciates, then you can leverage it to buy another house and rent out one of the houses.
So long story short is to discuss with your financial advisor. It isn't always wise to pay off your mortgage.
Hi Gabrielle, love your video about finances. Can you do a video on how you choose Accounting as a career and how you study for the courses. Currently am an accounting study and not sure if I’m into audits or tax. Advice is appreciated.
could you please add weekly payments also in this scenario
don't have a house yet, but looking soon and plan to go for a 15 year mortgage instead to really save on interest and then I;ll apply one of these strategies too so hopefully I can be done in more like 10 years cause then my kids will be in college and I'd love to help them
Thank you *Strategic techies* so much for you’re advice as my credit score is 771 and wanting to increase it as much as possible as l’m just trying to look out for my future. I’ve subbed you.
My brother, you needed this! I already had ideas of raising my score. But I just found more ways because of this. *Pecuniary backdoors* are such a blessing, keep going frl!
If you took that lump sum of $20k and put it in a HYSA account then pulled $1666,00 a month to put on your mortgage you would end up better off correct?
Because a mortgage’s interest is front loaded would it be wise to double pay the first 1/3. Pay 50% extra on the 2/3 and regular payments on the last third?
Giving me more capital in invest in years 10-30 in a 30 year mortgage?
Biggest lesson i learnt in 2023 in the stock market is that nobody knows what is going to happen next, so practice some humility and low a strategy with a long term edge.
Nobody knows anything; You need to create your own process, manage risk, and stick to the plan, through thick or thin, While also continuously learning from mistakes and improving.
Thank you for this informative video, Gabrielle!
Question:
My mortgage is 5.0% Fixed on 400k loan
- Even though I pay principal, my interest won't deduct until the 3 year period? or do I understand this incorrectly? So, would it be better to save money for 3 years and pay when the mortgage opens? because the interest won't decrease even if I pay now until the mortgage reopens
Thanks!
Can I have a copy of the Excel sheet, please?
When it comes to a lump sum payment, do you know why it is limited per year? That makes no sense lol Is it because the bank wants to keep the money coming in as revenue/income?
It's to ensure they profit from the mandatory interest paid, more predictable for the lender. Usually it's a 5 year term, and you can pay up to 20% per year of that term but those numbers vary from lender to lender.
The slower you pay it off, the more interest they make long term. That's why.
Would you mind to share the spreadsheet 😊
Gabrielle Thank you very much for your sharing ❤
Is really usable ! But how can we talk to the bank if I Want to change pay off Mortge early ? I m the payment ? Because my Mortage just start about 1 Yr ? Is it possible to change mine is 5 yrs fixed turns
Pls teach me thank you
Thank you *Strategic techies* so much for you’re advice as my credit score is 771 and wanting to increase it as much as possible as l’m just trying to look out for my future. I’ve subbed you.
My brother, you needed this! I already had ideas of raising my score. But I just found more ways because of this. *Pecuniary backdoors* are such a blessing, keep going frl!
What if you put down 20% and make $400 additional principal payments (2 out of the 3 options) would that be more beneficial than just the additional principal payments?
Thank you *Strategic techies* so much for you’re advice as my credit score is 771 and wanting to increase it as much as possible as l’m just trying to look out for my future. I’ve subbed you.
My brother, you needed this! I already had ideas of raising my score. But I just found more ways because of this. *Pecuniary backdoors* are such a blessing, keep going frl!
So the strategy is, pay as much as you can as often as you can
Is there a suggested amount that ppl put towards down payment? Should we put down as much as we can or just the minimum required?
That depends on how long you plan to live in it.
There are plenty of reasons why you may want to put less or more. This also depends on where you live as fees and other things may be different than in Canada where she and I live.
But if you are talking about a minimum you should put down in terms of saving on interest and fees, in Canada , if you put 20% down you can avoid paying for default insurance. If you have less than 20% down, this insurance costs around 2% to 4%. This is tired based on the percent you put down. The minimum I recommend is 10%. This is when the default insurance fee starts to decrease.
Great video. Thanks for posting. 💯💪🏾
I could only 2 out of the 3 strategies, unfortunately here in the UK bi-weekly payments are not common.
I’m confused between Scenario 1 and 2. If I go with Scenario 2, Am I only paying $2400 annually towards the principal vs Scenario 1 - 20k towards principal, meaning Scenario 1 would’ve been a better choice?
My brother, you needed this! I already had ideas of raising my score. But I just found more ways because of this. *Pecuniary backdoors* are such a blessing, keep going frl!
Thank you *Strategic techies* so much for you’re advice as my credit score is 771 and wanting to increase it as much as possible as l’m just trying to look out for my future. I’ve subbed you.
2.5% interest changes the dynamic though, isn’t it? If we are better off earning lot more than 2.5% in the market, it is best to delay the payoff as much as possible.
Thank you *Strategic techies* so much for you’re advice as my credit score is 771 and wanting to increase it as much as possible as l’m just trying to look out for my future. I’ve subbed you.
My brother, you needed this! I already had ideas of raising my score. But I just found more ways because of this. *Pecuniary backdoors* are such a blessing, keep going frl!
Love this infornation!
You mentioned make sure the extra payment is going to principal and not interest. How do I ensure this?
You don’t have to. The base payment you are already making is paying the interest. So anything over the base payment can only go to principal.
Shocking is an understatement. I almost fainted!
Hi, I love the way that you explain the formula, but I would like to see if you can share the Excel spreadsheet I do not know how to do it
FANTASTIC VIDEO THANKS SO MUCH
What about a video on how to
Leave canada with all your money
There is no video like that, because it's impossible...
Love it! Thank you 🙏 ❤
Thank you. I'm shocked
Is everything you said is true to Canada?
Do you guys in America & Canada have offset accounts?
do you have a scenario where the extra $200 mortgage payment is put towards mutual funds at 7% or stocks at 10% annual gain. I was thinking to accelerate my mortgage as well but caught with this conundrum.
I would say I don’t know how I find you on TH-cam, but I know better. My husband and I have been in prayer so that we get our credit scores up and our credit record in great shape so that we can purchase our forever home. It was no one but God that led me to *Pecuniary backdoors* . I thank God for this wisdom. Bless you.
*I’m glad it works for me and i am sure it will works for you as well*
So the only way you can pay it off super early, (like two years) is to sell it? How expensive is an early pay off?
I would say I don’t know how I find you on TH-cam, but I know better. My husband and I have been in prayer so that we get our credit scores up and our credit record in great shape so that we can purchase our forever home. It was no one but God that led me to *Pecuniary backdoors* . I thank God for this wisdom. Bless you.
*I’m glad it works for me and i am sure it will works for you as well*
I do bi weekly payments, however I never thought I could pay a bit more on the principle. I’m in Canada, can you setup extra payments/higher payments at anytime or do I need to wait for renewal time?
Depends on what your lending contract allows.
Hi Gabrielle, can I use this templet for a car loan or any loan?
It’s either the same of close enough to get you within a few percent. She may be doing a compounding interest calculation here whereas loans are almost always not compounding.
Great video and food for thought. Can I ask please what was the costs reductions if we paid the 20% lump sum $8000 start of each year 1, then again a 20% start of year 2, year 3 etc wouldn't that drastically affect the interest and total term against Scenario 2 bi weekly?
There are tons of online calculators you can use for this.
We have loans of about 370000 and interest of 3.52% interest but also making extra payments 2000 how lo Ng it will take to pay off the mortgage
I would say I don’t know how I find you on TH-cam, but I know better. My husband and I have been in prayer so that we get our credit scores up and our credit record in great shape so that we can purchase our forever home. It was no one but God that led me to *Pecuniary backdoors* . I thank God for this wisdom. Bless you.
*I’m glad it works for me and i am sure it will works for you as well*
Just pay CASH!
Nobody seems to address property tax increases and needing to plan for higher payments.
Suddenly this scenario does not apply to Canadian fixed-term mortgages of 5 years. How is one supposed to use this template for that?
My brother, you needed this! I already had ideas of raising my score. But I just found more ways because of this. *Pecuniary backdoors* are such a blessing, keep going frl!
Thank you *Strategic techies* so much for you’re advice as my credit score is 771 and wanting to increase it as much as possible as l’m just trying to look out for my future. I’ve subbed you.
Thanks for the video!
By setting up the extra payment to go towards principal, does that mean I need to contact the bank and mention that any extra payment I want it to paying off the principal? Can you please shed more light on this?
I wish you can make a course for CPA Students, that would be very helpful for me. - Just a thought :)
You should definitely contact your bank. My bank allows me to choose “principal” or “regular payment” for any additional payment I make online but if I don’t specify principal it just looks like I’m trying to make my mortgage payment early so I had that happen the first time I did it (they applied the extra payment to the next month’s mortgage payment and I had to call and have it fixed.
@@sally0404 thank you so much.
@@mohammedosman88you’re very welcome!
Hey Miss Gabrielle, if am to take Biweekly payment, does this mean I have to get my monthly payments and Divid it by tow. {paying half of my monthly payment on the 1st of the month and another half on the 15th of the month. Please Guide me thanks 🙏
Again my monthly payment of $2,436.07 this is part of the principal and interest that’s my monthly payment I guess it’s the one you said about but some has to divid it into to equal payments
The best way of getting rid of interest payments is , by with cas no mortgage 😂 may be small property. But also remember if we pay back mortgage double in twenty years valu of money will also be depreciated to l half in twenty years. Not a big loss. On the other hand your home price will be 4 times in 25 years. You just paid down payments may be 20%, rest was bank money.
Why do you say bi weekly payments are only one 3xtra payment when it’s actually 2?
It’s actually only one extra payment because you are essentially paying two extra bi-weekly payments per year (There are only two months each year with 5 weeks instead of four) which equals only one extra monthly payment. Most people who pay monthly are making 12 payments (24 payments if you split that amount into weekly payments) Paying biweekly results in 26 payments so two additional half payments = 1 extra mortgage payment Hope this makes sense 😊
Why pay off a mortgage ealry when you can have a higher return in the stock market?
Agreed. I think it's psychological though. People feel less stressed
You guys don't have offset accounts? Just put all the money in offset account to offset the interest.
Different countries have different systems. Offset accounts are common in Australia, but are uncommon in NZ.
Pay off your mortgage. Stop paying property taxes. Government takes your home. It’s was never yours to begin with.
Your life was never yours to begin with thats usa for ya. ID, social security right when you born 😄. Its just the land thats not yours. Just gotta move your paid off house off from their property
That lump sum is one time only? I can't imagine throwing extra lump sums every year is shaving off less than 200 a month extra
I would say I don’t know how I find you on TH-cam, but I know better. My husband and I have been in prayer so that we get our credit scores up and our credit record in great shape so that we can purchase our forever home. It was no one but God that led me to *Pecuniary backdoors* . I thank God for this wisdom. Bless you.
*I’m glad it works for me and i am sure it will works for you as well*
My brother, you needed this! I already had ideas of raising my score. But I just found more ways because of this. *Pecuniary backdoors* are such a blessing, keep going frl!
I’m glad to be fortunate enough to get to know their name and looked it up online.
@10:25 it is $1,074 not 1704!!
watching
Nice
Thank you *Strategic techies* so much for you’re advice as my credit score is 771 and wanting to increase it as much as possible as l’m just trying to look out for my future. I’ve subbed you.
My brother, you needed this! I already had ideas of raising my score. But I just found more ways because of this. *Pecuniary backdoors* are such a blessing, keep going frl!
So can call my bank and set up a biweekly payment schedule? And they will accept it ? Or just pay biweekly
Saving $200 per month interest just by parking emergency fund in redraw😎🤙
great!
You did not include inflation, present value vs future value. Say a fixed 30 years payment of $2100 30 years from now is not the same value of $2100 now😁 so what you need to do is don’t pay extra on the payment but rather invest that money now to let your money to work for you and give you the best value.
Thank you *Strategic techies* so much for you’re advice as my credit score is 771 and wanting to increase it as much as possible as l’m just trying to look out for my future. I’ve subbed you.
*I’m glad it works for me and i am sure it will works for you as well*
Why would anyone want to pay off their mortgage early? How high would your interest rate have to be for that to be a good choice?
Life events. Imagine having a paid off mortgage before you have kids. Or if you a loner, then it doesnt matter of you lose in the stock market or your house.
@@ychongy having kids wouldn’t make me want to be inefficient with my assets. If anything, having a family should make you want to be responsible and make better choices.
The math isn’t mathing. There’s no way paying $2400 monthly is better than paying off a lumpsum of 20K
Thank you *Strategic techies* so much for you’re advice as my credit score is 771 and wanting to increase it as much as possible as l’m just trying to look out for my future. I’ve subbed you.
My brother, you needed this! I already had ideas of raising my score. But I just found more ways because of this. *Pecuniary backdoors* are such a blessing, keep going frl!
One lesson I've learnt from billionaires is to always put your money to work, and diversifying your investments. I'm planning to invest about $30k of my savings in stocks this year, and I hope I make profits.....
You are right. The best approach I feel is to diversify investments- by spreading investments across different asset classes like bonds, real estate, and international stocks, they can reduce the impact of a market meltdown.
There are 30 yr available here? Dont actually "own your home" ultimately anyway. Own nothing and be happy agenda also!!?? BTC....
Yes as of recently
Today it's not the interest rate its the taxes.
i find how you structure start of your videos by outlining "in today's videos."
20 years early here, no kids.
Bi-weekly payments aren't a thing. They make no difference on your loans. This misinformation has been around for at least 20 years. If this was the case it would ve smart to just make the early payment instead of Bi-weekly payments to take more off.
Again. If I pay my mortgage on the 15 instead of the 30th that has zero effect on your payments.
That $400000.00 home will be worth in excess of $1 million in 30 years.
I would say I don’t know how I find you on TH-cam, but I know better. My husband and I have been in prayer so that we get our credit scores up and our credit record in great shape so that we can purchase our forever home. It was no one but God that led me to *Pecuniary backdoors* . I thank God for this wisdom. Bless you.
*I’m glad it works for me and i am sure it will works for you as well*
❤
I want to buy a house together with you, live together, and get married 😂
Lol. That isn’t what a biweekly payment is. What you are explaining is an accelerated biweekly payment payment (goes by other names as well)
A true biweekly payment is the same annual amount as a monthly payment. In other words the monthly payment multiplied by 12 and then divided by 26.
And he video is only useful if you have the money to do this. Most people unfortunately are dumb and max out their budget when buy things and will never have the ability to pay anything extra. And if someone has the ability to pay off anything near average mortgage in less than 10 years(as your thumbnail is saying) they would be better off investing.
These “save money”, etc… channels are pretty much all just clueless people copy and pasting things they see online without understanding everything they are reading, and just give common sense advice. This is no different.
My brother, you needed this! I already had ideas of raising my score. But I just found more ways because of this. *Pecuniary backdoors* are such a blessing, keep going frl!
Thank you *Strategic techies* so much for you’re advice as my credit score is 771 and wanting to increase it as much as possible as l’m just trying to look out for my future. I’ve subbed you.