Pros and cons of paying off a mortgage early
April 26 2018
- More cash flow: Once your mortgage is paid in full, you'll have fewer overhead costs on your home and lower monthly living expenses.
- Reduced financial stress: By eliminating your mortgage bill, you'll have more disposable income available.
- Increased equity in the home: A paid-in-full mortgage means you own the home outright and can sell it or turn it into a rental property at any time.
- Loss of tax benefits: Contributing extra funds to your 401(k) would have more tax advantages, and you'll lose the mortgage interest deduction.
- Reduced liquidity: Cashing in on your home equity is more difficult than accessing a savings account or rainy day fund.
- Savings starvation: By pouring all your money into your mortgage, you're likely starving other savings and investment accounts in the process.
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