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re: When has paying off a house ever been a decision someone regretted?
Posted on 4/5/25 at 12:42 pm to ned nederlander
Posted on 4/5/25 at 12:42 pm to ned nederlander
Am a 'peace of mind, low tolerance risk' type. A number of years ago - 15ish or so - paid off mortgage, satisfied student loans as well as credit card balances....all this in anticipation of retirement (semi).
Were these the optimal money decisions? I don't know - doubt it - but was unwilling to carry debt load into upcoming changes in life. Is fairly easy in hindsight to determine 'should I or should I not have'.
Were these the optimal money decisions? I don't know - doubt it - but was unwilling to carry debt load into upcoming changes in life. Is fairly easy in hindsight to determine 'should I or should I not have'.
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Posted on 4/5/25 at 12:46 pm to bama1959
"You can’t deduct home mortgage interest unless the following conditions are met.
You file Form 1040 or 1040-SR and itemize deductions on Schedule A (Form 1040).
The mortgage is a secured debt on a qualified home in which you have an ownership interest. Secured Debt and Qualified Home are explained later."
IRS Pub 936 Mortgage Interest Deduction
Most tax payers are better off w standard deduction now so mortgage deduction may do you no good.
You file Form 1040 or 1040-SR and itemize deductions on Schedule A (Form 1040).
The mortgage is a secured debt on a qualified home in which you have an ownership interest. Secured Debt and Qualified Home are explained later."
IRS Pub 936 Mortgage Interest Deduction
Most tax payers are better off w standard deduction now so mortgage deduction may do you no good.
Posted on 4/5/25 at 12:54 pm to TorchtheFlyingTiger
It makes zero financial sense to payoff the mortgage. Zero.
If you’re risk averse, you don’t need to invest the money into a volatile market, but you can put the money in a savings account (or CD or some other secure return) earning 4% interest. The money never disappears, you still have access to it, and you still come out ahead.
If for some reason the interest rate flips relative to the mortgage in the future, you can pull it out and pay it off then.
The “peace of mind” of trading fairly minimal cash flow in lieu of a significant fund, just doesn’t line up.
If you’re risk averse, you don’t need to invest the money into a volatile market, but you can put the money in a savings account (or CD or some other secure return) earning 4% interest. The money never disappears, you still have access to it, and you still come out ahead.
If for some reason the interest rate flips relative to the mortgage in the future, you can pull it out and pay it off then.
The “peace of mind” of trading fairly minimal cash flow in lieu of a significant fund, just doesn’t line up.
Posted on 4/5/25 at 1:34 pm to Will Cover
"No longer paying interest, although it's "only" at 2.5 % with about 12.5 years left out of a 15 year mortgage"
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That's almost FREE money. Invest your money elsewhere!
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That's almost FREE money. Invest your money elsewhere!
Posted on 4/5/25 at 1:40 pm to LSUtigerME
Fwiw
when I paid my house off in 2000 my mortgage rate was 7.5… was thrilled since it was down from the mid to low teens we had been paying.. if I would have put it in the market early 2000 the sp index was around 1500
You know what the sp index was early 2013… around 1500
So worked out for me to pay off and pay college tuitions for my kids and have peace of mind..
These low interest rates and market returns of more recent years are a gift that hopefully will result in yall having ridiculous money when you retire..
when I paid my house off in 2000 my mortgage rate was 7.5… was thrilled since it was down from the mid to low teens we had been paying.. if I would have put it in the market early 2000 the sp index was around 1500
You know what the sp index was early 2013… around 1500
So worked out for me to pay off and pay college tuitions for my kids and have peace of mind..
These low interest rates and market returns of more recent years are a gift that hopefully will result in yall having ridiculous money when you retire..
This post was edited on 4/5/25 at 1:44 pm
Posted on 4/5/25 at 8:52 pm to Will Cover
I'm at 6%, so the economics are a little different. That said, I can't wait to pay off my house and throw a lot of extra money at it to do so earlier than most people ever will.
Posted on 4/5/25 at 9:56 pm to Will Cover
This only works if you pay off the house and immediately start putting what your former mortgage payment was in the stock market.
Otherwise keep your current mortgage and start putting most of the money you would have paid off through mortgage with in stocks/retirement.
Either is a win.
Otherwise keep your current mortgage and start putting most of the money you would have paid off through mortgage with in stocks/retirement.
Either is a win.
Posted on 4/6/25 at 6:23 am to Will Cover
I'm in the keep your mortgage camp, but I will say to ask yourself, what would you do with the extra $771? Save? New car? Piece of mind?
If you go with a high yield savings account, I recommend Wealthfront. 4.5% with referral. 4% normal. Withdrawals and deposits are fast
If you go with a high yield savings account, I recommend Wealthfront. 4.5% with referral. 4% normal. Withdrawals and deposits are fast
Posted on 4/6/25 at 6:27 am to Will Cover
I know it doesn’t make financial sense to pay off my mortgage, but if I ever hit lotto, that is exactly what I will do.
Posted on 4/6/25 at 7:28 am to Stamps74
I paid mine off early by making extra monthly payments. Paid off a 30 in about 8 years.
I know that the opportunity cost makes it the wrong decision, but I also know that I couldn’t convince my wife to live frugally so we can invest more, but I could convince her to live like that to pay off the house.
Basically, the goal gave us the motivation
I know that the opportunity cost makes it the wrong decision, but I also know that I couldn’t convince my wife to live frugally so we can invest more, but I could convince her to live like that to pay off the house.
Basically, the goal gave us the motivation
Posted on 4/6/25 at 7:28 am to Will Cover
From a pure financial standpoint, not paying off the mortgage is the better option. But if you want the peace of mind, go for it as that is something you are purchasing and life is too short to be stressed over money.
My mortgage is 3.25 over 30 years. We are aggressive savers and could probably pay off the house in 3-4 more years (year 8-9 of the mortgage). We have our cash laddered in T-bills earning a little over 4%. I won’t pay off the mortgage, but I’ll probably recast the mortgage to have a super low payment knowing I can pay it off quickly, save more money and not be as stressed about how much we owe.
My mortgage is 3.25 over 30 years. We are aggressive savers and could probably pay off the house in 3-4 more years (year 8-9 of the mortgage). We have our cash laddered in T-bills earning a little over 4%. I won’t pay off the mortgage, but I’ll probably recast the mortgage to have a super low payment knowing I can pay it off quickly, save more money and not be as stressed about how much we owe.
Posted on 4/6/25 at 8:30 am to Suntiger
First video that pops up today when I typed in YT on my web browser was this:
Rachel Cruze - Dave Ramsey's daughter
Cookies, web tracking, and specialty ads/videos are real.
As you can imagine, she's for paying off your house as soon as possible. She provides her reason within the quick video.
Rachel Cruze - Dave Ramsey's daughter
Cookies, web tracking, and specialty ads/videos are real.
As you can imagine, she's for paying off your house as soon as possible. She provides her reason within the quick video.
This post was edited on 4/6/25 at 8:31 am
Posted on 4/6/25 at 8:33 am to Teddy Ruxpin
quote:
Total monthly payment: $1,300.91
quote:
If this was my all in mortgage I would have financed that house for a 100 years
I recognize that my note is most likely less expensive today than some 1 and 2 BR apartments.
I previously had 2.875 % mortgage (15-year), and we were down to about 6.5 years. Divorce happened in 2022. I refinanced (15-year) and was able to obtain 2.5 % interest rate, slightly before all rates spiked upward.
Posted on 4/6/25 at 8:36 am to Big Scrub TX
quote:
Why does converting your cash nest egg into a much less liquid asset give you "peace of mind"? Legit question.
Because I will have a 6-month supply of emergency cash (savings) on hand as well, which also will provide me with peace of mind as well.
quote:
Paying off 2.5% money seems really counter-productive to me.
I don't disagree. I like the idea of starting a high-yield savings account, and having my mortgage deducted (paid) from this account.
Posted on 4/6/25 at 8:36 am to SlidellCajun
quote:
Here’s one
30 year mortgage at 2%
Monthly note $1,000
20 years in
The note is mostly equity at this point
You decide to pay it off to improve cash flow and invest.
Instead of investing though, the wife just starts spending $1,000 /month more on Amazon crap
No wife!
Posted on 4/6/25 at 8:39 am to Will Cover
Every decision you make cannot be done purely based on numbers.
Most of your decisions must be based on numbers for you to have financial success long term.
For me, I paid off my house and I have a peace of mind like I never imagined possible. It freed me up to leave my investment portfolio and my rental properties in the hands of someone I trust and I don’t care what the stock market or real estate market does.
I check it quarterly and any major changes/withdrawals require my approval.
Paying off my house made retirement planning enjoyable. I don’t care about the “numbers”. I love my job and never plan to retire. If at the end of the day, I leave my kids 5% less - that is their problem for being ungrateful.
For me - no house payment is bliss.
Most of your decisions must be based on numbers for you to have financial success long term.
For me, I paid off my house and I have a peace of mind like I never imagined possible. It freed me up to leave my investment portfolio and my rental properties in the hands of someone I trust and I don’t care what the stock market or real estate market does.
I check it quarterly and any major changes/withdrawals require my approval.
Paying off my house made retirement planning enjoyable. I don’t care about the “numbers”. I love my job and never plan to retire. If at the end of the day, I leave my kids 5% less - that is their problem for being ungrateful.
For me - no house payment is bliss.
Posted on 4/6/25 at 8:39 am to LSUtigerME
quote:
It makes zero financial sense to payoff the mortgage. Zero.
If you’re risk averse, you don’t need to invest the money into a volatile market, but you can put the money in a savings account (or CD or some other secure return) earning 4% interest. The money never disappears, you still have access to it, and you still come out ahead.
If for some reason the interest rate flips relative to the mortgage in the future, you can pull it out and pay it off then.
The “peace of mind” of trading fairly minimal cash flow in lieu of a significant fund, just doesn’t line up.
This makes sense to me. I haven't made a decision, but I am glad to read so many different perspectives, all which serve to help me make the best decision possible when the time comes.
Posted on 4/6/25 at 8:41 am to LSU6262
quote:
I'm in the keep your mortgage camp, but I will say to ask yourself, what would you do with the extra $771? Save? New car? Piece of mind?
Continue to save, invest, and take a great vacation annually.
Posted on 4/6/25 at 8:57 am to Will Cover
I paid mine off when it got low enough and always paid extra. No regrets. One less thing. Yeah yeah yeah I know all about the reasons why not to. Peace of mind has value as well.
Posted on 4/6/25 at 3:16 pm to Will Cover
I paid mine off, but it was at 6.25%.
15 years ago or so.
Don't regret not having a monthly payment.
There is something comforting about it. Especially when you start investing what you used to be paying.
15 years ago or so.
Don't regret not having a monthly payment.
There is something comforting about it. Especially when you start investing what you used to be paying.
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