Engineers get a special package at the National Bank. You do get a line of credit at prime plus 1% but you have to pay an annual fee for the required credit card.

Thank you,

Jean

We used many methods at our disposal. I should correct myself – it will only take us 7 years to eliminate the mortgage – if that is something we want to do. We can slow that down to about 7 1/2 years so we can allocate $ to TFSA’s.

We upped our monthly payments by 20% (which is the maximum) 3 years in a row once we felt comfortable with the additional impact to cash flow.

We put down the maximum 20% prepayment when I had 2 consecutive years of exceptional commissions. In other words, additional money went to the mortgage/RRSP’s/RESPs before it went to discretionary income. In fact, except for a vacation I can’t remember “frittering” any of the unexpected windfall.

Any tax refunds/raises went to mortgage paydown or RRSPs/RESPs as required.

When our mortgage came up for renewal last year, we had paid down $183k in the first 5 years. Now, we have an SM mortgage and it is down another $50k since.

This turned out to be a great compromise – I don’t mind debt as long as its productive debt as I favour investments. My wife takes the opposite stance. We’ve been very fortunate to be able to eliminate debt (or convert into good debt) while still being able to invest in our children and our retirement.

One of the reasons why we were so focussed on eliminating our mortgage is that is, for my wife, the number one priority for her. So, when we moved from a townhouse to our 2 storey it became obvious that if we had stayed put we would have been mortgage free only 2 years into owning the new home. (We moved because we thought we’d need the space with the children from two previous marriages growing up – turns out one left the nest right after!)

Our current VRM mortgage is completely open and is only at 1.5% so obviously the amount we pay each month into our mortgage is almost exclusively paying down the principal. Each month accelerates the paydown ratio which helps keep the motivation high.

One item that helped us with the additional cash flow burden is that we didn’t have any car payments (finance or lease) for the last 6 years. Just this year we finally retired one 14 year old vehicle because the rust was too much. Our “new” vehicle is 4 years old while our “well enjoyed” vehicle is 8 years old. I hope to get at least another 5 years out of it since we’ve been diligent in rust proofing it every year.

We take at least one vacation each year and I don’t think we deprive ourselves. But, we focus on putting money towards the mortgage, RRSP’s and RESP’s with unwavering focus. By taking care of that first, you can get a lot more accomplished than waiting to see how much money is left at the end of the year.

Forgot to answer your question- YES I will have a Mortgage Burning party!!!

Hopefully 4 years

We currently pay bi-monthly and add extra to our payment.

If anyone has any ideas please let me know.

Next year, my wife and I should be in a position to pay off our mortgage for the first time in our lives. That means we would have eliminated a $300k mortgage in 8 years.

However, we would still have a very large HELOC (because of the SM). While it may be technically better to just pay the interest on the HELOC, there is nothing wrong per se with paying down the balance of the HELOC. It is not the suggested SM end game, but my wife would feel better entering retirement with no debts if possible.

I think a smaller retirement portfolio with no debt is a pretty good compromise considering she supported us embarking on the SM in the first place.

Would you have a ‘mortgage burning party’ to celebrate the momentous occasion?

I also get 200 free cheques/year, an additional free full-service chequing account (which I have no use for) and have access to unsecured line of credit at Prime + 1%.

Turns out there’s some value to our engineering degrees after all!

As for the HELOC – it depends how much risk you want to take. I think I would consider paying off the HELOC and just using your free cash to buy more stocks or etfs.

#1 Since you are an engineer, you should be able to have a full free bank account with no minimum. There are specifics programs for engineers, you might want to check it out!

#2 If you are paying less on your line of credit than on your mortgage, I would consider paying it off completely and continue your steady payment on your HELOC instead of your mortgage.