Comments on: Is It a Mistake to Pay Off Your Mortgage Early?

By: Christine Luken

Christine Luken — Sat, 20 Mar 2021 14:27:07 +0000

In reply to Elizabeth. Love this perspective Elizabeth!!

By: Christine Luken

Christine Luken — Sat, 20 Mar 2021 14:22:37 +0000

In reply to Bret @ Hope to Prosper. Thanks Bret! I'm so happy to join you in the mortgage-free club! You are so right about lack of debt giving you more freedom and options.

By: Christine Luken

Christine Luken — Sat, 20 Mar 2021 14:21:18 +0000

In reply to Annie. That's so awesome Annie! Congrats!!

By: Joel

Joel — Wed, 24 Feb 2021 16:22:10 +0000

In reply to Bret @ Hope to Prosper. Freedom > money! That's awesome Bret, congrats!

By: Joel

Joel — Wed, 24 Feb 2021 16:21:05 +0000

In reply to Annie. Congrats!!!!

By: Annie

Annie — Wed, 24 Feb 2021 06:40:54 +0000

We paid off our home recently, too! I enjoyed this post immensely because it made me feel even more assured we did the best thing for our financial future. We use the $ which would be going to the mortgage towards investments, and all of that is helping to grow our wealth. Thank you for sharing!

By: Bret @ Hope to Prosper

Bret @ Hope to Prosper — Tue, 23 Feb 2021 22:26:46 +0000

Huge Congrats Christine on paying off your mortgage early.

I paid my final mortgage payment in 2019 and it’s a wonderful feeling. When I bought my house, I was 31 years old and I didn’t want to be paying on it until age 61. I wanted to pay it off in 21 years, but it took me 23. I’m not missing that payment one bit.

With 3% mortgages, this may not seem to make sense, but I wanted the freedom to save more or retire early and now I have it. Money creates freedom and so does lack of debt.

By: J

Mon, 22 Feb 2021 19:13:41 +0000

I believe there is debate in this space because there are those who want to treat the decision as either purely mathematical or emotionally. But as many above have commented, the variables needed to make the decision are far messier. I have had to deal with my own version of the author’s critic (I’m not convinced it isn’t the same person! lol). In my opinion, the failing of the pure math argument is that it does not overlay Risk Analysis and Maslow’s Needs Hierarchy on top of the financial math. So long as the real return of your investments remains above your interest rate, you are in the money. But shelter, food, and water are the large base of the Needs Hierarchy for a reason. Depending on your specific risks, it might not be wise to rely on the ability to liquidate investments if you suddenly find yourself jobless, hospitalized, or disabled. In my experience, all of those conditions tend to converge at once. You are more likely to lose your job during a recession and the stock market is often not performing that well during such a time period. Then you lock in losses in principle as well as incurring enough fees and penalties that could bring your real rate of return to at or even below your home interest rate. Because let’s face it, you’re probably going to pull from tax deferred accounts prior to retirement years since those were the most efficient to be contributing large amounts of money to in the first place. That combination is especially familiar for those who went through the Great Recession during their working years. I believe the author’s questionnaire above for conditions that you might want to meet prior to deciding to pursue early home payoff are highly valuable, since I wouldn’t ever advise anyone to focus so intently on one leg of financial stability that they ignore all the others completely. There is an additional one that I would like to add, however. I don’t want to get too much into it, but I believe there will be many who can relate to it. In addition to meeting the above criteria, are you concerned that an existing or highly likely to exist medical, genetic, or mental condition could flare up as a result of an external trigger and endanger having a roof over your head for either yourself or your loved one(s)? There are deeply personal risks within the answer to that question that can, and in many case absolutely should, override the opportunity cost of investing vs securing a shelter. And for a subset of us, that answer could be the difference between feeling safe enough to seek help/leave a situation or allowing the circumstances to escalate and end us. Whatever your decision, your choice is valid.

By: Chris

Chris — Mon, 22 Feb 2021 16:07:27 +0000

I love the peace of mind of having my house paid off. I hate debt. When I was a teenager, my Dad suggested I could pay out my car repair expenses, as I went to the same shop that he did. I just couldn’t do it, since I had the money and couldn’t handle having that hang over my head. My husband and I paid both our first home and our current home, off early. The first one was a very low price and was owner financed and the owner told us if we paid it off early, he would take some off the principal. However, on our current home, I was working at a high stress job and wanted to quit working. I worked aggressively on paying off the house and not shortly thereafter I was able to quit working. I currently have a very part-time job working at home.

By: Joel

Joel — Sun, 21 Feb 2021 21:44:10 +0000

In reply to Impersonal Finances. Yeah it's funny how people's opinions of debt change depending on the asset you borrow against. One of my family members took out a 0% car loan, which people would advise to pay off ASAP, even though the debt isn't really costing anything.