Some homeowners ask whether they should to pay off their mortgage early or focus on investing their spare cash. Here are some valid reasons for paying off or not paying off your mortgage:
By paying off your mortgage early, you could save thousands of dollars in interest annually. Additionally, being debt free could give you peace of mind and a sense of freedom. Once your mortgage is paid off you’ll have extra money and more financial flexibility to invest, save or give, or simply have better monthly cash flow, especially if you are nearing retirement.
The disadvantages of paying off your mortgage early come mostly from the loss of tax benefits like the ability to deduct your mortgage interest. You could also be giving up historically low home mortgage interest rates when you could be using your extra cash to pay-off higher interest debt like credit card bills. Also, some mortgages include pre-payment penalties.
If you’re considering an early mortgage payoff, prioritize your needs and those of your family before finalizing your decision.