Deciding to pay off the mortgage is a tricky decision, especially for those of us who locked in super low rates. I always assumed the best choice was to pay off the mortgage asap (long before I’d learned about FIRE), but with a 2% mortgage I’m inclined to never actually pay it off early. I have more money and flexibility by keeping my savings invested than if I dumped it into my mortgage.
If I had a higher rate (like 5%+), I think I’d be more inclined to agree with you. Though it’d have to be obscenely high rates for me to decide taking the tax hit of selling investments in order to pay off the house.
Yes, that’s true. While I’m fairly risk tolerant in my personal life, I’m not with finances. I invest in index funds and prioritize cash flow. I would rather spend a fixed amount up front for a guaranteed “dividend” (benefit) than be leveraged with more money in the bank.
For example, after my home is paid off, I’ll probably explore a solar roof to reduce my monthly utility expenses. What’s the payoff, like 10-15 years? But knowing I can survive on a small, relatively fixed amount each month means I have more security and flexibility. It’s approaching the same goal, just in a different way.
But I also bought my (latest and probably last) home in late 2022. I have a 7.5% interest rate or something, so, you know, not a particularly difficult decision in my case.
Deciding to pay off the mortgage is a tricky decision, especially for those of us who locked in super low rates. I always assumed the best choice was to pay off the mortgage asap (long before I’d learned about FIRE), but with a 2% mortgage I’m inclined to never actually pay it off early. I have more money and flexibility by keeping my savings invested than if I dumped it into my mortgage.
If I had a higher rate (like 5%+), I think I’d be more inclined to agree with you. Though it’d have to be obscenely high rates for me to decide taking the tax hit of selling investments in order to pay off the house.
Yes, that’s true. While I’m fairly risk tolerant in my personal life, I’m not with finances. I invest in index funds and prioritize cash flow. I would rather spend a fixed amount up front for a guaranteed “dividend” (benefit) than be leveraged with more money in the bank.
For example, after my home is paid off, I’ll probably explore a solar roof to reduce my monthly utility expenses. What’s the payoff, like 10-15 years? But knowing I can survive on a small, relatively fixed amount each month means I have more security and flexibility. It’s approaching the same goal, just in a different way.
But I also bought my (latest and probably last) home in late 2022. I have a 7.5% interest rate or something, so, you know, not a particularly difficult decision in my case.