Sounds like an opportunity to remove some wood paneling. 
That was the second project we did on our old house. The kitchen had been remodeled but we pulled down paneling (the fake crap) in our entry, library, and living room. Looks loads better.
I kept the paneling in the basement because itās legit 1" pine and I think thatās perfect for a basement rec room!
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My first house was a fixer upper with old cheap paneling and carpet from the 70ās. I just painted over the paneling, which was a good look. Took 2 coats of Kilz before I could paint it. There were old oak floors under the nasty carpet, which looked great after I had them refinished.
Previous owners painted over it in the master bedroom. I had planned on taking it down but the bath remodel nearly gave me an existential crisis, and I just slapped a coat of paint on it and called it good for now. It really looks pretty decent, so while Iād love to go back to plaster, no rush.
Thatās like my house. Upstairs (part of the original) is thick, proper wood paneling. The wood paneling in the random addition room is clearly fake and thin.
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When I did this, the total cost was more. You seem to have gotten a deal
This may be the year I close down one credit union account. Weāve had it for 15+ years, was great when we lived closer to a branch, but we havenāt been within 2 hours of a branch in 13 years now and the only reason I kept it open was because we had a life insurance policy on me that, since we were at that CU, allowed monthly payments instead of annual payments.
Great when we had 4 kids and I was still trying to get my feet under me in this career, but now I could write the annual check if needed. Plus, we havenāt had a loan through that CU in almost 10 years; rates are higher, savings rates are not any better / requires a much higher amount to establish certificates.
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Paying off my mortgage is getting more and more tempting. Our 1.875% 7/1 ARM re-fiād in 2020 will adjust in 2027 and thereās no cap on the annual increase, so Iāll be immediately shunted to whatever normal rates are then.
As of today, $148k remaining on the mortgage with $123k taxable brokerage and $16k cash in a HYSA waiting earmarked for it.
Most likely the ideal play would still be to pay off as slowly as possible and invest the difference. Right now Iām still overpaying $1k because of the inertia from setting it up, but also putting $2k/month into the HYSA and $900/month into the brokerage. I should cease the $1k overpayment, but eh, for the cost of perhaps $750 in interest over a few years not too worried about it. We donāt need the liquid funds.
However, being debt-free is very tempting. Iām leaning toward in 2027 paying it off, making it a 9-year mortgage, then I free up about $3700/month including the earmarked $2k/month going into the HYSA. (I donāt count the $900 to brokerage as āfreed upā because that fungible amount will then fund a car purchase, vacation, home renovation. However, the $900 will become more like $2000/month to brokerage and remainder goes to retirement.)
Iām going to let mine ride as long as I can get a fairly certain return in a brokerage. I think I am at 3% fixed, havenāt prepaid a dime. I might have the equivalent balance available saved up in about a year.
I like the idea of being debt free, but also recognize that having liquidity available for āfreeā is very valuable, especially if we ever decide to move from the current house.
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Fair point about moving house, as we have discussed it as a vague possibility. If rates decrease to say 4% by 2027 Iāll have a hard time pulling the trigger, 3% or under is a no-brainer to ride it out, but if itās 6%+ I may end it then.
I assume if mortgages go to more like 4%, my HYSA will no longer be 5.17%, but clearly if it were Iād ride it out.
I think Iād fine the psychological side of it particularly tempting, almost regardless of the potential return of investing the difference
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I am not close to thinking about paying off a mortgage, so perhaps I just canāt relate to the mindset, but I am curious. What is so appealing about paying off the mortgage and being debt-free? At least for me, property taxes / insurance / HOA take up about ~1/3 of my total payment, so paying off the mortgage doesnāt eliminate all financial obligations. I could see the psychological side of it being tempting if it were completely wiping the monthly payment off the table, but just reducing it doesnāt entice me much.
My taxes, insurance, and HOA comprise less than $300/month. While itās impossible to own land and be 100% ādebt-freeā due to tax, the amount is paltry compared to my current $776 mortgage + $1000 overpayment, not touching on the admittedly fungible HYSA and brokerage $2900/mo that are loosely earmarked for it.
I just personally donāt like debt. Iād appreciate knowing I could lose my job and keep the house for under $4k/year. Plus we are planning on a child, and I like the idea that my expenses under childcare will be less than when I had a mortgage, particularly if you count the entire $4,676/mo noted above.
take me to the promised land
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This is a sentiment I can relate to.
Paying off a US mortgage however can be a more complicated decision than for a Canadian mortgage because of your tax deductibility of some mortgage interest and more mortgage options than we have.
My sonās variable rate mortgage (very common here) went from 1.45% to over 6% in a little over a year. He had sufficient assets that were not tax sheltered to pay it off. I was not confident he could earn over 6% per annum after tax on his investments so advised him to pay off his mortgage and be debt-free.
Part of the reason the Canadian economy is struggling while the US booms is that relatively fewer US folks with existing mortgages are feeling the pinch (yet) of higher interest rates. (New home buyers, of course, are affected). In Canada, it has clearly diminished many folks spending ability because of the prevalence of variable interest rate mortgages.
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Iām in a HCOL area relative to the absolute 'Po surrounding me, which puts me at a lower MCOL.
Bought a house for $271,500 mortgage @ ~3.00%(?) and refiād not long after at 1.875%. Taxes are between $2-3k and insurance is around $700, HOA is $360 as basically all it does is maintain the road. Note, the home is now worth at least $450k, probably a touch over $500k because the market is dumb and Iām lucky.
Downside is that itās pretty much a 2-hour drive to the nearest city of note. 6, if you go the other cardinal direction.
I bought my first house in 1992 and sold it in 1999. It was a dirt cheap fixer upper in a somewhat sketchy area. My taxes were $16 annually due to a low appraisal and homestead exemption. I donāt remember insurance, but it was also really cheap. My total house payment including taxes and insurance escrow was <$400/mo.
I wasnāt really thinking about buying a house then, but a coworker lived in the neighborhood and told me about it. I did the math and it was cheaper than rent. For maybe 3 years ther my sister lived in the other bedroom and we split the payment.
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My property taxes are ~12k/year. I think I need FEMA to help with this disaster.
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Iām currently investing rather than paying off the house. But when I retire I think Iāll pay off the house to keep income low. I need to run the numbers but I think between paying lower tax rates and getting some ACA subsidies itāll be reasonably sane.
And if thereās a crash Iāll probably feel better knowing the house is mine, and Iād be able to live on a low withdrawal rate while I wait for the recovery and feel less stressed. Even if the math is slightly worse I think the psychology will make up for it. YMMV and all.
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My first house was a fixer upper ~1930 bungalow in Topeka, I canāt recall exactly but the mortgage with escrow was around $600/mo in 2002.
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