1) Do Nothing
This first plan is the easiest. I don’t pay down a extra cent until I turn 45 and then I pay out the remaining balance with some of my retirement savings.
2) Mild Acceleration
My current time line to be mortgage free is 19 years which isn’t too far from my plan to retire at 45 (16 years). So another option is to save myself a lot of interest costs and prepay just enough of the mortgage to ensure it is gone by the time I’m 45. I estimate I would need to pay off approximately $9000 in the next two years which is completely doable.
3) Completely flatten the mortgage
Of course this option was a bit fun to figure out. If I put every spare cent I have against the mortgage I can be complete debt free in just over 8 years. Which also has some appeal since then my cost of living drops off the deep end and I could look at doing semi-early retirement perhaps by age 40.
Right now I’m thinking about doing option 2, since I’m very close to trigging my mortgage equity plan with my bank. So if I drop the mortgage fast and decide I need some money to invest I can pull it out and if I use it to invest in a taxable account we can right off the interest against our taxes (Basically I could do a small version of the Smith maneuver).
I must admit option 3 also has some appeal. Yet for now I think I’ll try for option 2 for now. Any one else been in a similar situation, if so what did you do?