Does Paying Off Your Mortgage Early Make Sound Financial Sense?

Pay Off Your home early or not
Home Sweet Home

At one time or another you’ve probably thought about what it would be like to finally pay off your mortgage. You’ve likely dreamed about living the life you desire, unfettered by the ball and chain of having to pay your loan payment every month.

Before you make a decision, take a close look at your financial options to determine if it really would be wise to pay off your loan early. In some situations, it’s better not to pay it off.

Consider these reasons, both for and against, an early payoff in your situation.


Benefits of Paying Off Your Mortgage

You’ll save big on interest. Depending on where you are time-wise in the term of the loan, you stand to save literally thousands of dollars that you would have paid in interest over the life of your loan.

You won’t have the monthly stress of a house payment. This can be a great relief!

As retirement approaches, paying your house off means you won’t have to struggle with house payments on a reduced income.

You’ll have hundreds of dollars to spend or save monthly. It’s empowering to know that whether you want to take a couple more trips a year or concentrate on saving for the kids’ educations, you’ll have money to put aside for it.

Your confidence about your financial situation will increase. After all, if you pay off your mortgage early, you’re likely doing something right with your budget. You have a lot to be proud of!


Why You Might Not Want To Pay Off Your Mortgage

Taking all of the above into account, sometimes you can still come out ahead without paying off your mortgage early.

Here are some reasons why paying off your mortgage early may not be wise

Home Sweet Home


Paying interest has its advantages. With mortgage rates being so low now, you might be paying only 3 or 4% on your mortgage. Yet you might find an investment that pays you a 10% return. So you would make more money if you used your extra funds to make a higher rate of interest from an investment rather than pay down your mortgage.

  • Bear in mind that if you’re getting an income tax deduction on your mortgage interest, that interest is costing you even less overall.

Keeping your dollars in hand may be wiser. Paying off your mortgage in one lump sum might not work in your best interest. Doing so doesn’t increase your net worth because you’ll have less cash.

  • Also, paying all your cash into your house means you have substantially fewer liquid dollars. You’d have to sell or refinance your house to get your cash back if you need it. It’s unwise to use all your cash to pay off your mortgage, especially if you could be earning interest on it.

Avoid taking cash out of your 401(k) to pay off your house, especially if you’re less than age 59-1/2 because of the extra penalty. Plus, all the money you take out is taxed at your ordinary income rate.

Paying off loans with higher interest rates first makes more sense. It’s smarter to pay off a higher interest debt than your mortgage, if your mortgage has a lower interest rate.


Answering the question of whether to pay off your mortgage early takes some deliberation. Ensure you take into account your specific situation. Strive to determine how you can save or make the most money and you’ll be happy with your choice.

Can Spending Big On These Five Items Help You Save Money?

buy a good coffee maker
Great Coffee beans deserve a great coffee maker

Many financial experts focus exclusively on teaching you to conserve your hard-earned dollars any way you can. Sometimes, however,  there are  reasons that you should spend a little more to ultimately save more of those dollars. For instance, when you’re dishing out your hard earned money for furniture, appliances, or other things you use every day, then you want them to last and hold up over the long haul.


When you go shopping for these items, consider this information:

Coffeemakers. If you’re a coffee aficionado, you know how important it is to make a good cup of coffee. On the other hand, if you prefer only the occasional single cup, you should still make the most financially smart choice when buying a coffeemaker.

  • Do you drink several cups daily? Choose a sturdy, energy-efficient coffeemaker model. The least expensive model will likely not fulfill the task of keeping up with your coffee habit.
  • Do you love your coffee but limit yourself to one cup daily? Consider one of the single-serving models. Yes, they’re expensive, but they’ll last for many years. Plus, if you don’t want to buy the single serving pre-measured coffee pods, you can still purchase the smaller filter cup to fill it with bulk-purchased coffee.

Cooking knives. Good knives will last longer than you will.

  • If those cutting tools last you for 60+ years and you never buy another one, you’ll be money ahead even if you buy expensive knives. Be willing to pay more for quality, guaranteed-for-life knives.

Lawn mowers. Those who mow their own lawns know how incredibly frustrating it can be to go out to the garage, pull the lawn mower out, check the oil, fill it with gas, and then the mower won’t start. You only have two hours to get the grass cut. How annoying!

  • A good lawn mower is constructed with quality parts and will pay off many times over. Pay a few bucks more to get the best (not necessarily the biggest) lawn mower.

Bed mattresses. Buying your mattress at a discount or general department store often means you aren’t getting the quality of construction you’d get if you went directly to the mattress maker’s retail store. Why?

  • Mattress makers produce lesser-quality mattresses to sell for less (with their brand names on them) in those discount and department stores. Chances are good that if you pay a bit more, you’ll receive a higher quality product that will hold up over the long run.

Sofas. Think of the abuse a sofa goes through—kids jumping on it, you propping your feet on it, and your spouse taking a nap on it. It needs solid construction and well-designed cushions to last over the years.

  • If you’ve ever owned a cheaply-made sofa, you know this is true: splurge when it’s time to buy a new sofa–$1,800+ is wise. If you can get a high-end sofa on sale, go for it.



When you are shopping for any of these items, you should, of course, do your homework in advance to find out as much as possible about the particular brand and model you’re planning to purchase. Look for sales on well-designed, quality-constructed items.

The bottom line is that when you pay more for these items, they’ll pay you back by lasting more years with no or fewer break-downs.


Is It Really Possible To Retire? Perhaps Sooner Than You May Think.

Retire Sooner With These Strategies

Do you find yourself feeling like you won’t ever have enough money to stop working? If so, it’s time to perk up. You can retire sooner than you think by making some changes now.

Enjoying Retirement by the Lake
Nothing like Enjoying Retirement

By Using Some or All of These Strategies You Can Retire Sooner Than You Ever Dreamed:

Identify activities that bring you joy and then create an income stream doing them. When you retire, you’ll have more free time to fill up. Why not do it engaging in activities you love and earning some money at the same time? Start your “cottage industry” now, while you’re working, just to try it out. Here are some examples:

  • If you like to make birdhouses for your yard, make extra to sell at local craft fairs or gardening shops.
  • Perhaps you get a kick out of being around elderly people. Start your own Elder Assistant business, charging families to “visit with and assist” elderly parents for a couple of hours a week.
  • Maybe you’ve developed a real love of gardening and taking care of your lawn. Consider mowing lawns in your neighborhood or planting bushes, weeding, and doing other gardening tasks for neighbors for a price.
  • The key is to think of ways to charge others to do what you love to do.

Think of creative ways to cut your expenses related to work right now. Consider the obvious costs, like carpooling, using public transportation, and carrying your lunch to work. Reduce every expense possible connected to your current work to reap the most savings and benefit your future retirement.

Open your mind to an adjusted lifestyle where you do more with less money. You can retire sooner if you learn to live more inexpensively now.

  • Purchase generic groceries.
  • Shop farmers’ markets for fresh produce.
  • Only buy meat that’s on sale.
  • Concentrate on “buy one get one free” offers at the grocery store.
  • Do your shopping at a discount grocery retailer.
  • Have Meatless Mondays.
  • Be more flexible about what you choose to eat, based on what’s on sale.
  • Reduce the level of cable television you pay for.
  • Get rid of your telephone land line and only pay monthly fees for your cell phone.

Live in a smaller house than you can afford. Your kids will eventually grow up and leave. Concern yourself with living conservatively and paying off the mortgage after you ensure all other bills are paid off. In a smaller home, you’ll live comfortably with fewer expenses.

Retain part-time employment now. Save 100% of what you earn from your second job and save it for retirement. Remind yourself daily that how you live, work, and save now will determine when you can retire and how you’ll live then.

Vow to learn how to delay gratification.Go back to the old-fashioned way of living where you save up to buy something. This way, you spend only cash to get what you want.  The delay in time that it will take for you to accumulate the money to pay for the item will help you determine how much you actually want the item.


When you’re truly committed to a goal of retiring sooner, you’ll keep your focus and follow through with these six strategies. You’ll quit working before you know it and love your simpler lifestyle!