An NYC couple broke a golden rule of mortgage payments, and it helped them retire early

• Josette Chang and Alexander Nathanson paid off their NYC apartment mortgage in 2024.
• Despite having 'good debt,' the couple chose to eliminate their mortgage for peace of mind.
• Eliminating their housing payment also allowed Chang to quit her job and Nathanson to reduce his hours.

In 2018, Josette Chang and Alexander Nathanson bought an apartment together in Midtown East.

Chang had been renting in Manhattan since moving there for graduate school, and was tired of the annual rent hikes.

"Every year you get a letter from your landlord telling you how much more you have to pay," she told Business Insider. "I'd been going through that cycle every year and realized, wow, this is only going to go up."

For Nathanson, who grew up in Brooklyn, living in the city was a lifelong dream: "When you get to Manhattan, you've made it in New York."

The couple purchased their apartment for about $770,000, paying half in cash and financing the rest. Their initial mortgage rate was 3.75%. A few years later, they refinanced and got it down to about 3.1%.

By most financial standards, they had "good debt" — the kind of loan personal finance experts often advise borrowers to keep, especially if they can earn higher returns investing elsewhere. But in 2024, the NYC-based couple paid off their home anyway.

Breaking the 'don't pay it off' rule

For a while, the couple assumed they would upgrade their space. They saved aggressively, stockpiling cash in a high-yield savings account and touring larger apartments in their neighborhood, but eventually decided against it.

"Moving up would be just riding the hedonic treadmill," Nathanson said. "You get a bigger place now, and a few years later you'll want a bigger place again. We consciously decided to get off that treadmill."

That left them with a large pile of cash and a decision to weigh with their financial advisor: invest the cash and keep the mortgage, or eliminate the debt entirely.

While conventional wisdom says don't rush to pay off a low-rate loan, as you can likely earn a higher return by holding the debt and investing extra cash elsewhere into higher-yielding assets, returns aren't everything.

"It was kind of a psychological weight we could get rid of," Nathanson said.

They chose to wipe it out. Chang remembers writing the check in 2024: "My hand was a little shaky. I got the document, came home, and told Alex, 'It's done.' It felt surreal."

The following month felt even stranger when they sat down to pay their bills, Nathanson added: "It was like, wait a minute, something feels weird here. It almost felt like we were cheating."

Business Insider reviewed public records filed with the New York City Register that confirm the couple's mortgage was paid off in September 2024.

They still pay their co-op maintenance fee, but their largest monthly expense has been gone for more than a year, allowing them the freedom to walk away from their day jobs. Chang left her finance job in 2024, while Nathanson, a physician, scaled back his hours at the hospital. He doesn't work because he has to — the couple said they have enough in savings to sustain their lifestyle — but because he wants to.

"We have to acknowledge our privilege," Nathanson noted. "We're two high-income professionals."

Looking back, they say buying worked in their favor, especially as New York rents have climbed.

When asked whether owning has been more affordable than renting, Nathanson replied, "As of today, I would say yes. The rental market in New York City is so overdriven right now. The rent prices are crazy. It seems beyond inflation."

At least for now, they feel confident in their decision.

"It's not a free apartment, but we're like, we hacked into something," he said.