Is Early Mortgage Payoff Wise?
This week I came across an article on another personal finance blog that answers a question that has crossed my mind many times, long before we started Spending It.
The question: Is it worthwhile to work to pay off your mortgage early, or are there better ways to spend that money.
The blog: Five Cent Nickel
The gist: Five Cent Nickel provides a good list of both advantages and disadvantages of paying off a mortgage early. The “pros” of early mortgage payoff seem to consist mainly of the peace of mind in owning your home outright and saving the interest that you would otherwise be paying on your mortgage. On the “cons” side, the fact that your mortgage is probably the cheapest interest rate that you have is a factor, and also some thoughts on the likely value of the dollar in the future. That’s a very brief summary, so you should check out the rest of the article here: Pay Off Mortgage Early? Or Invest?
My thoughts: After reading the article and giving the subject a little more thought, I decided that I probably would rather not knock myself out trying to pay off my mortgage early. My mortgage is at a good interest rate, and the fact that the interest is tax deductible is nice also. So, I would probably rather use any extra money that I have to: (1) pay off credit cards; (2) invest my money in an investment that is likely to earn more than the rate of interest on my mortgage; and/or (3) use that extra money to live a little and take an extra trip with my wife or the whole family.
How about you? Would paying off your mortgage early give you great peace of mind, or would you get a better Quality of Life Return On Investment spending it on something else?Tags: early mortgage payoff, paying off a mortgage early, Personal Finance Blog