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Paying off RM350k Mortgage – A thought experiment

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In 2023 I move in from a single storey house to a double storey house in Ipoh. The double storey house costs around RM350k – here is a thought experiment I carried out on how one can possibly pay off a RM350k mortgage in 7 years, assuming a continuously growing income on a yearly basis.

The main idea is basically what if I start paying partial settlement annually with a small sum, but double that amount every year. What it would look like in practice with a 7-years timeframe:

  • Year 1: RM1k
  • Year 2: RM2k / Accumulated: RM3k
  • Year 3: RM4k / Accumulated: RM7k
  • Year 4: RM8k / Accumulated: RM15k
  • Year 5: RM16k / Accumulated: RM31k
  • Year 6: RM 32k / Accumulated: RM63k
  • Year 7: RM64k / Accumulated: RM127k

This is still way far from the amount of RM350k. But what if I starts with RM3k?

  • Year 1: RM3k
  • Year 2: RM6k / Accumulated: RM9k
  • Year 3: RM12k / Accumulated: RM21k
  • Year 4: RM24k / Accumulated: RM45k
  • Year 5: RM48k / Accumulated: RM93k
  • Year 6: RM 96k / Accumulated: RM189k
  • Year 7: RM192k / Accumulated: RM381k

So this looks pretty good. But, from year 4 onward, it would be almost unthinkable to fork out RM24k, RM48k, RM96k hard cold cash annually. So we are kinda back to blank canvas.

Now, what if I started with a higher number and breakdown the annual amount to smaller pieces?

  • Year 1: RM5k
  • Year 2: RM10k / Accumulated: RM15k
  • Year 3: RM20k / Accumulated: RM35k
  • Year 4: RM40k / Accumulated: RM75k
  • Year 5: RM80k / Accumulated: RM155k
  • Year 6: RM160k / Accumulated: RM315k
  • Year 7: RM320k / Accumulated: RM635k

With a starting digit of RM5k, we can hit pretty substantial amount in year 6 already. Let’s do some adjustment to this.

  • Year 1: RM5k RM15k
  • Year 2: RM10k RM15k / Accumulated: RM30k
  • Year 3: RM20k / Accumulated: RM50k
  • Year 4: RM40k / Accumulated: RM90k
  • Year 5: RM80k / Accumulated: RM170k
  • Year 6: RM160k RM80k / Accumulated: RM250k
  • Year 7: RM320k RM80k / Accumulated: RM330k

This looks pretty good but the numbers still don’t look very convincing that it is achievable.

Here is how it looks like if I were to convert the same calculation from MYR to SGD:

Loan amount RM350k = SGD116.7k

  • Year 1: SGD5k
  • Year 2: SGD5k / Accumulated: SGD10k
  • Year 3: SGD6.7k / Accumulated: SGD16.7k
  • Year 4: SGD13.4k / Accumulated: SGD30.1k
  • Year 5: SGD26.7k / Accumulated: SGD56.8k
  • Year 6: SGD26.7k / Accumulated: SGD83.5k
  • Year 7: SGD26.7k / Accumulated: SGD110.2k

We are still SGD6.5k short. So let’s adjust the first 3 years again.

  • Year 1: SGD7.8k
  • Year 2: SGD7.8k / Accumulated: SGD15.6k
  • Year 3: SGD7.8k / Accumulated: SGD23.4k
  • Year 4: SGD13.4k / Accumulated: SGD36.8k
  • Year 5: SGD26.7k / Accumulated: SGD63.5k
  • Year 6: SGD26.7k / Accumulated: SGD90.2k
  • Year 7: SGD26.7k / Accumulated: SGD116.9k

For anyone who managed to earn SGD or USD while working remotely in Ipoh, this actually doesnt look so unachievable

Now let’s break those numbers down to monthly and quarterly amount:

YearAnnual Amount (SGD)Monthly Amount (SGD)Quarterly Amount (SGD)
17.8k6501.95k
27.8k6501.95k
37.8k6501.95k
413.4k1.12k3.35k
526.7k2.23k6.68k
626.7k2.23k6.68k
726.7k2.23k6.68k

I will just leave this here.

If you find this useful and attempt to try this, do let me know how it goes.

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