Should you prepay your mortgage?
Paying off your home ahead of schedule can feel great. But don’t let it interfere with the funding of your retirement accounts.
For the past year my wife and I have been putting an additional $500 per month toward the principal on our 5.25% 30-year fixed mortgage. The psychological freedom of not having a mortgage is very appealing to us, but the argument for trying to invest the extra cash at a higher rate is compelling too. What’s your take on paying off the mortgage early?
As you note in your question, there is a psychological dimension to this decision. And that psychological or emotional element deserves to be taken into account as well. The question is, how much weight does it get? If the idea of dumping that mortgage really appeals to you - if it will make you enjoy life more - then I can see devoting at least some money to prepaying your mortgage. This can especially make sense if you’re timing the payoff so you enter retirement without a mortgage payment hanging over your head.
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