Should I pay off mortgage early?

5 Replies

Hi all,

With the interest rate so low for the past few years, is it a good idea to pay off the mortgages early?  What are your thoughts on this?

Thanks for any insights!

@Xin Z.  depends on your goals and appetite for risk. Low rates make it attractive to borrow money, but owning real estate free and clear is a great accomplishment. Of course cash in hand makes it a lot easier to buy more property. 

What's your interest rate? Investing the available cash on the markets should bring in a 7%-10% (conservative) or more if you take risks.  


Real Estate Agent Fairfax

Within your question is your own answer - you know it's in there :)

You don't give enough information on your goals, what else you would do with the money, etc.  For me, my money can work much harder than saving me 5% interest.

As has been detailed in the above responses, there are 2 answers:

1) Financially, no it does not make sense to pay it off. Just the reverse. With historically low interest rates, you should be borrowing more and locking in long term.

2) Life- style wise, maybe. It's hard to "lose" a house that is owned free and clear.

Where are you in you life and your investing goals? Only you can decide if #1 or #2 makes more sense for you.

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