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Not that I feel one way or the other, but I assume you mean that its better to simply pay scheduled amount and not make additional payments?
Its a thought. Would the amount saved on interest paid be the equivalent to the dollar value of 2047 dollars?
When you take inflation and the ability to invest at higher rates it makes sense to pay the mortgage as scheduled. If you would need that "extra" money you paid in say 15 years from now the bank will probably charge you to get "your" money back.
I close on a house next month. If I really push and live frugally, I should be able to pay it off in 5 years or less at my current income level.
I probably won't push too hard so it'll likely be more like 6-7 years.
I paid off a small house I bought for around $85K in about 18 years and then my wife immediately filed for divorce and got the house. That was a bad day!
Fortunately I was able to start all over and got some Middle East work that let me first buy a new house nicer than the first and then pay it off this spring after just 10 years. Thank you Allah and the nice Muslims who like to live leisurely and hire "white slaves" to drill their oil wells! :-)
and give up how much in opportunity costs ? odds are even a cd over all those years will end up returning more .
over time that debt becomes more meaningless .
that 35k our first homes cost us back in the 1970's was a ton of money . today that is not even the price of a decent car . a 30k mortgage payment likely would not cover a months utility bills here .
so think things through very carefully . a dollar today is worth a whole lot more than a dollar tomorrow so advance paying off a mortgage at these rates that you can stretch out is financially not such a great idea from a return stand point . there may be other reasons for doing it but from purely a financial point it likely is not going to be the best idea .
We have a 3.375% 30-yr fixed. Over the past three years my stock portfolio is up on average over 10%. If I had used the money to pay down my mortgage, I would have lost a lot of money. I also don't like the idea of being house poor. The liquidity of having liquid savings appeals very much to me.
Same thing with my car loan. I can pay it off tomorrow, but why would I pay off a 1.5% interest rate?
If you were 80 years old would you prefer $300,000 in your pocket and a monthly payment of $1,326 OR
No money in your pocket and no monthly payment.
Show me the money!
If you were 80 years old would you prefer $300,000 in your pocket and a monthly payment of $1,326 OR
No money in your pocket and no monthly payment.
Show me the money!
That's ridiculous, at least in some situations.
I will have Money in my pocket and no payment. Less than 5 years ain't going to make that big a dent in my plans. 15 years MAYBE, but not less than 5.
In my case, it will probably be 3 years total to payoff and mortgage burning, with one year already down, maybe 3 years 4 months, I don't know exactly as I diverge unrealized as yet gains towards it too {tax return, school taxes refund, bonuses}. it will be 5 or less at any rate.
Then I can divert ALL principal and interest into other affairs. i don't think I will lose that much in just 3 years. AND I certainly DON'T have the principal and interest money to invest in other ventures anyway right now, so it doesn't really matter HOW much "I would lose" in the time of paying it off early. Sure I have other funds, but the biggest bite of my monthly nut is the mortgage, NOT my investment portfolio.
I religiously put away 10%, but the rest of what I can put away always remains to be seen now. BUT: My P+I is another 16% of my income, so it costs me MORE/. I will have at least a new reliable 26% I can save/invest if I DON'T have a housing payment. {property taxes are not included, our mortgage total is 21% of income}
You see the painting one way, I see it differently. I say its a dog chasing his tail, and yo say its a galloping horse.
If you were 80 years old would you prefer $300,000 in your pocket and a monthly payment of $1,326 OR
No money in your pocket and no monthly payment.
Show me the money!
I don't think anyone is advocating depleting everything at 80 years old. A better question might be: $500,000 in your pocket and no mortgage, or $800,000 and the payment of $1326.
And the answer is.....
Depends on what you intend to leave to your heirs. There is no one universal answer here and everyone is entitled to their family values. You have the right to leave nothing, a little, or a lot.
We bought our house and closed the day before thanks giving 2015. I have calculated we will have it totally paid off before June, 2018 at the latest.
i don't think 2 1/2 years to pay it off is bad!
I'm not loosing much by paying it off and it will free up more cash to invest for retirement than we would have had if we just paid the mortgage off on regular 30 year terms.
We do have a little other accumulated debt from upgrading the house, so We have a choice, put the extra towards it and pay it off early, or add it to the investments for retirement...
What to do, what to do....
I just HATE owing money!
As my grandmother used to say: "Sun is down, day is done, and I don't owe no one!"
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