Should You Pay Off Your Mortgage Early? With Rates Rising, the Answer Gets More Complicated
A common question we get asked as financial planners is whether homeowners should put extra money toward their mortgage to pay it off early. Of course, the exact answer will depend on your goals, but with previous mortgage interest rates being near historic lows, it often didn’t mathematically make sense to pay down the mortgage. While past performance does not guarantee future results, over the long term, the return from the stock market has been higher than the interest rate paid on these mortgages. However, with interest rates on mortgages rising, the math part of the equation gets a little more fuzzy if you’ve taken out a mortgage recently, or may in the near future. Here are some things you should consider before deciding whether to allocate extra money toward paying off your mortgage.