Paying off the mortgage early is a hot topic when it comes to money management. There seems to be a good amount of quality logic for keeping it and equally valid logic for paying it off early. So what’s a homeowner to do?
After we bought our first house, I began to study this idea. I read all the opinions and ended up agreeing with the major arguments for not paying off the mortgage early. These points seemed solid to me:
“You have such a low interest rate.”
“You could invest and get a better rate of return on your money.”
“You have money tied up in your house and can’t get to it for a big emergency.”
“You are getting tax breaks.”
“You are hedging against inflation, especially with a fixed rate mortgage.”
Then during 2010, some things started to change in our lives and we began to rethink our strategy. After much debate, we decided to pay off the mortgage early. The reasons may surprise you because only one of them was based on a mathematical concept/equation.
Let me preface what I’m about to share by saying that we could not have paid off the mortgage early unless we had the extra money to do so. That’s seems obvious, but I think it’s an important point to make. We reached that point in our lives where all other debts were paid and the other aspects of financial planning – emergency fund, kid’s college, retirement – were being covered.
So that freed us up to throw extra money at the mortgage. We moved money to the mortgage balance from our excess monthly income, from our rental property income, from tax refunds, from investments and from any other money we could get our hands on. All in all, it was a four year journey to complete once we finally became serious about it.
Here’s why we did it.
Reasons to Be Paying Off the Mortgage Early
Reason #1: A Personal Conviction