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Guess what? The median mortgage payment in America is now over $1,700 a month. And that is a big chunk of change. You could buy 242 pounds of Sour Patch Kids with that kind of money. And trust me, your boy did the math. But did you know that your mortgage payment could be $0 a month? All you have to do is...
Pay off your home early. It's impossible. It can't be done. Look, I get it. Mortgages in America are usually six-figure deals that people assume they'll be paying off for the rest of their lives. Which is fitting since the word mortgage actually comes from an old French word that translates to death pledge. And to that I say, Sacrebleu. To all my French viewers who don't want to watch the show anymore, adios. Your mother was a hamster and your father smelt water.
of elderberries. But I decided a few years back, I didn't want to take my mortgage to the grave and you shouldn't either. With some focused intensity, I was able to pay off my home loan way ahead of schedule while I'm still young enough to play pickleball without my compression socks. Here's what I learned.
No matter how low your interest rate is or how much of a tax deduction you get, paying off your mortgage early is worth it. In this video, I'll explain why and tell you how to get it done as fast as possible. All I ask in return is a quick like and subscribe. It's way less of a death pledge and more of a perpetual jubilation contract, an infinite merriment promise, if you will, an eternal sunshine accord. Hit the button and I'll stop, although I can keep going. Plenty more where that came from.
A happiness guarantee bond. That's enough. Put down the mic. Anyways, like I said, paying off the mortgage early is worth it. And not just for the bragging rights. I know a lot of you prefer your cash liquid instead of being tied up in the equity of your home. But there are so many benefits to getting rid of your mortgage. For starters, paying off the mortgage early skyrockets your net worth. Net worth is one of the only math equations I actually enjoy. It measures real wealth, not look at me, I'm hiding how broke I am behind this midlife crisis Mazda Miata wealth. Very different. How hot the weather is.
And remember, net worth is a simple accounting equation. It's not your opinion or how you feel. Net worth is what you own minus what you owe. Your assets minus liabilities. And a home loan is probably one of the biggest liabilities you'll ever owe. In fact, having a mortgage keeps most people's net worth in the negative for years. And a national study of net worth millionaires discovered that millionaires don't hang on to that 30-year death pledge. They pay it off early, way early. In fact,
in about 10.2 years on average. So why are these net worth millionaires in such a rush to get rid of their mortgage? Because they know that the sooner their house is paid for, the sooner it becomes a net worth boosting asset instead of a risky liability. And they know it'll save them tons of money in the long run because paying off a mortgage early gives you a discount on the price of your home. Did you know that your house costs a lot more than the latest number in the Zillow price history? It's actually that number plus all of the interest you signed up for.
And how much interest you pay basically depends on three key ingredients: the loan amount, the interest rate, and the time it takes you to repay the loan. And the longer you take to pay off your loan, the more interest you pay, which increases the total cost of your home. So for example, let's say you buy a $400,000 home with 20% down and a 6% interest rate. Well, on a 15-year mortgage,
you would pay 166 grand in interest over those 15 years, which puts the total cost of the home at $566,000. Now on a 30 year mortgage, you would pay over 370 grand in interest, which puts the total cost of the home at 770 grand. So just by cutting the payback time in half, you would save over $200,000 in interest alone. So remember kids, broke people pay interest and wealthy people...
I don't know who the adult was in that children's choir, but I appreciate it. Next benefit, paying off your mortgage early frees up your income. This is a big deal because your income is your number one wealth building tool. Now imagine being able to take your entire mortgage payment and invest it instead. Even beyond investing, maybe you've got other financial goals like beefing up the college fund, beefing up the generosity fund, or beefing up the beef fund. More ribeye for this guy.
The point is, you'll have the freedom to choose what you do with that extra income. And freedom leads to this next benefit. Paying off the mortgage early lowers your stress. And I'm pretty sure that translates to a longer life with more joy and less trips to the gastroenterologist. By the way, gastropub, way different than a gastroenterologist. Learn that the hard way. And I've got a lifetime ban from one of those.
Comment below and let me know which one you think it is. Because here's the deal. As long as you have a mortgage, you technically don't even own your house. The lender does. And most people don't think about that on a daily basis. But if you ever lose your job, get sick and can't work, or decide you want to take a major pay cut to pursue your ventriloquy dream, the lender isn't going to just let you slack on that monthly mortgage payment. Hey, wait a minute, pal. You've got a monthly mortgage to pay. You know what? Some dreams were meant to die.
Lenders don't care why you fall behind on your payments. All they care about is making money off the mortgage they sold you. In many cases, it only takes about four months of missed payments for the lender to start the foreclosure process on your home, which is why I don't want you to be in debt to them any longer than you have to. I want you living debt-free, payment-free, and risk-free. Wow, that actually sounds great. So are you in? Do you want to pay this mortgage off early? Great. I'll take your silence as a yes. Let's talk about how to get the job done.
It's a classic three-phase plan, like a lot of your favorite heist movies. Because in a way, we're about to metaphorically rob the bank of all that extra interest they would get if you took a leisurely 30 years to pay back your mortgage. Phase one, we got to get our ducks in a row. Now we got a few financial priorities you need to get in order before taking down the mortgage. First, you want to make sure you paid off all of your other consumer debts, right?
From credit cards, student loans, those power recliners you finance from roofs to go. It's all got to go. Then we're gonna save up an emergency fund of three to six months of expenses. And finally, we're gonna set aside some money every month for retirement. I recommend 15% of your household income into tax advantage retirement plans. Once those things are checked off your list, you're ready for phase two, which is all about looking for opportunity.
In this phase, you're going to go through every line item in your every dollar budget or your boomer spreadsheet and find every possible dollar you can spare without taking money from your emergency fund or your retirement contributions. What we need here is margin. There's only two ways to get margin, spend less and make more. Now on the spend less side, look at cutting back on things like eating out, clothing, subscriptions, or other non-essentials. You could consider trying a no spend month where you spend nothing but the absolute essentials and put
everything else toward your mortgage. Now, if you're not seeing a whole lot of margin, it's time to make more. Look at increasing your income through a promotion or a raise or pick up some side hustles. And if you need some ideas, check out my free side hustle quiz that will help you narrow it down. Go to georgecamel.com slash side hustle or click the link in the description below.
Now, once you've got the margin, you're moving on to the next phase. But speaking of heists, the last place you want to be is on the business end of a heist. Yeah, I'm talking scammers, fraudsters, and big data brokers who are using your own data against you. So if you want to help protect yourself, check out our sponsor, Delete.me. They comb through the underbelly of the dark web to find and remove your info from hundreds of these data broker websites.
and then they send you an easy to read report. So be proactive, keep yourself in the clear with an affordable plan from Delete Me. Right now, you can get 20% off by going to joindeleteme.com/george, or just click the link in the description below. That's joindeleteme.com/george. And while we're on this reverse Robin Hood journey of making money instead of losing it, one of the best weapons in your arsenal is a high yield savings account.
And if you're looking for a good one, look no further than online bank Laurel Road, one of the sponsors of today's video. With no minimum balances, no monthly maintenance fees, FDIC insured deposits, they check off all my boxes when it comes to a great high yield savings account. And speaking of great, right now they've got a 5.15% APY. It's amazing. So your money will be making bank. So go to laurelroad.com slash george or click the link in the description to get started. laurelroad.com slash george.
Okay, back to the heist. We're on to phase three. I need a bigger desk!
We're on to phase three. This is the execution phase. It's go time. Okay, this is the part where you actually put those extra dollars you found in the budget toward your mortgage and you watch that amortization schedule start to dwindle down to nothing. Now, when you start throwing extra money at the mortgage, it's very important that you make sure all additional payments are going toward the principle of the loan, not the interest. And you may have to specify this when you make that extra payment online or on the phone.
So there you have it. It's a three-step plan. Is it a long con? Yes, it'll probably take a few years, but that's okay. Remember when I told you that millionaires pay off their homes in 10.2 years on average? Well, people that follow the Ramsey plan, the one that I teach on this channel, they pay off their homes even faster in just seven years on average. So here's the deal. You have to create a mortgage payoff goal for yourself and stick to it, or even better, try to beat it
Mission accomplished.
So if you're all in, drop your goal heist completion date in the comments so we can cheer you on. Let us know what's left on the mortgage and how quickly you plan on attacking it. Now, I told you I paid off the house, but did you know that I bought the house in the first place with absolutely no credit score? If you want to learn more, check out this video next or click the link in the description. Thanks for watching. I'll see you next time.