Should You Pay Off Your Mortgage Faster?
In this episode of Financial Clarity for Doctors, Corey and Rachelle talk about the pros and cons of paying extra on your mortgage. When interest rates were lower, there was not a lot of incentive to pay down a very low-interest rate debt faster than necessary. But with higher rates, it may make sense for you.
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Some things to consider include:
- Your mortgage interest rate
- Do you have a magical pre-2023 sub 4% interest rate mortgage? That is much different than the 7% plus on most mortgages right now.
- How large of a tax deduction are you getting for your mortgage interest?
- Do you think you will stay in this home longer term?
- Think about all the things you could do with extra money each month
- Save more for retirement
- Start college savings
- Your risk tolerance
- Paying down debt has a predictable pay off
- One alternative to paying down debt is investing more money. You could potentially make more this way, but there are always risks to investing.
The mortgage pay off sheet from the bank will give you a bad case of sticker shock. No one likes to see that total interest paid amount. But consider all of the ways you can productively use extra cash flow before deciding that paying down your mortgage is the right choice for you. To hear more, listen to the full episode.
For more financial planning tips from Corey and Rachelle, find them on social media!
LinkedIn: @CoreyJanoff and @RachelleVanderzanden; Instagram: @CoreyJanoff and @VanderzandenRachelle; and Twitter: @CoreyJanoffCFP and @RachelleFinance
Discussions in this show should not be construed as specific recommendations or investment advice. Always consult with your investment professional before making important investment decisions. Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a broker-dealer, member FINRA/SIPC. Advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Adviser. Finity Group, LLC and Cambridge are not affiliated. Cambridge does not offer tax or legal advice.