Many of us have a healthy disdain for any type of debt, even debt that may be considered “good” (or at least not as bad as other debt). Mortgage debt is often considered a type of good debt. Interest rates are relatively low, the debt is on an asset that normally appreciates, and mortgages allow you to lock-in a fixed housing payment that isn’t possible with renting (yes, we know insurance and property taxes can increase your housing payment when you have a mortgage, but at least part of that payment remains fixed).
How quickly should you pay off your mortgage? For younger people, those under 45, we believe investing more for retirement often makes more sense than paying off your mortgage early. Paying off low-interest debt is Step 9 of the Financial Order of Operations. Once you start getting older, it may make sense to pay more towards your mortgage if you have the capacity. We believe everyone should aim to be entirely debt-free by retirement.
Check out the video below if you have any questions about when you should pay your mortgage off early!
