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Photo courtesy of Marques and Shyra
- Bloggers Marques and Shyra paid off their Sacramento home 21 years early.
- They paid an extra 1/12 of their payment twice per month, totaling two extra payments every year.
- They applied all raises, bonuses, and extra income towards their principal, and side hustled.
Bloggers Marques and Shyra of Black, Married, and Debt Free bought their home near Sacramento in 2009. By 2017, they'd paid off their 30-year mortgage. Paying off that debt has since allowed them to invest in real estate and earn passive income.
To pay off their mortgage 21 years early, they made two moves to shave years off their loan and decrease the interest they owed.
1. They used a simple calculation to make 2 painless extra payments each year
Marques and Shyra, who don't share their last name online, decided to do what they could to make extra payments towards their principal.
"A strategy we used early was the 1/12 rule. You take your monthly mortgage payment amount and divide it by 12," Marques told Insider by email. "If your monthly payment is $1,000, your 1/12 is $83. Then, you make an additional payment to your principal balance in the amount of $83."
With just 1/12 of their payment, they didn't notice the extra money they were putting towards their mortgage payment each month. "You will have paid the equivalent to one extra payment at the end of the year," Marques said. The couple estimates that this strategy helped them shave five years off their mortgage.
Marques and Shyra made that extra 1/12 payment bi-weekly to make an even bigger impact. They automated this extra payment to their mortgage lender so they didn't have to think about it. Automating payments can help you trick yourself into following a strategy consistently, whether you're saving, investing, or paying off a mortgage.
2. They took on any side hustles they could, and avoided lifestyle creep
For many people, earning more means spending more — something experts call "lifestyle creep." This couple consciously avoided lifestyle creep as they increased their income through raises, promotions, and side hustles.
They earned more money from their jobs through promotions, and Marques used his talents as a musician to make extra side money as well. "I used my gift to start selling music online, playing gigs on the weekends, helping music ministries at local churches, and doing work for hire as a studio session musician," he said.
In the end, their side hustles helped them make progress fast. "This strategy had the biggest impact on our payoff journey," Marques said. "The harder you work, the more you can apply to your mortgage."
This article was originally published in June 2021.