With retirement now on the horizon (your husband plans to retire at the end of 2024, just after he turns 66, with you retiring the following spring at age 65), you’ve resolved to begin the 2023 year by making oversized mortgage payments each month. The goal – retiring with your home at least close to totally paid for. Without the extra effort, the mortgage would not be paid off until the end of 2027.
Granted, given the recent rise in everyday costs of living, the extra payments will require a significant cutback in lifestyle on your part. Still, the interest rate on the mortgage is certainly quite low compared to rates today on any kind of borrowing. Plus, given the dismal performance of your retirement plans and other investments this past year, the notion of retiring mortgage-free is very appealing.
You might consider approaching the situation from a different direction, replacing the “forward” mortgage on your home with a reverse mortgage. While you would have no obligation to make monthly payments at all, you could continue making the same payments you’re now making on the mortgage, or even make the “oversized” payments you’ve been contemplating. The big difference – rather than just retiring your debt, you would be converting your housing wealth into a “reserve fund” that would function as a line of credit for future tax-free withdrawals.