Not sure if it’s worth paying off early

My mortgage payment is only $570, and half of that is taxes and insurance. It’s a $50k loan at 4%, and my salary is $60k. If I put every extra dollar I have into it, I can pay it off in 5 years. But after all that, I’m only gaining $300 a month of cash flow. What would you do?

Let it ride, build your investment portfolios and let the mortgage be on autopilot.

Addison said:
Let it ride, build your investment portfolios and let the mortgage be on autopilot.

If I decided to do that, would I just invest in an S&P 500 fund in a regular brokerage?

@Shay
Yes. S&P 500 index.

You should be contributing 15% of your income to retirement. Until you’re doing that, I wouldn’t pay extra on the mortgage.

Don’t pay it off. Put the extra money into a mutual fund where you can easily beat 4%.

Mai said:
Don’t pay it off. Put the extra money into a mutual fund where you can easily beat 4%.

Can you tell me what a mutual fund is compared to an index fund? We have a mutual fund for college savings, but it seems to be growing at a snail’s pace…

My mortgage is $125,000 at 2.25%. I’ve been averaging 9% on my investments, with the tax breaks it would be stupid for me to pay off my mortgage. I am collecting and living on 6% of my investments plus Social Security, and I am living on $150,000 a year.

Pay it off with a HELOC to be interest-only for 10 years (usually), and have access to the equity if needed.

I would not put every dollar into it. If anything, put that money into a HYSA and decide to pay it off in the future. I don’t like tying up that money into the house as it’ll be difficult to get it back out.

@Corey
This is exactly what I’m doing now for the same reason!

Invest that extra money in yourself to get a way higher salary.

I would not pay it off. I’d put a few extra dollars per month towards the principal then put as much money as you can comfortably afford towards investments.

Nothing wrong with a small mortgage. Forces the bank to maintain the title/insurance.

Are you investing in a 401(k) or Roth IRA? Those are returning much more than 4%.

I would first make sure I have zero high-interest debt. Then ensure I am getting the full match if available in my 401(k). Then save 6-9 months of expenses in a HYSA. Then put every dime into my 401(k) and IRA.

$570 including taxes? Wow! That is cheap! I pay over $625 just for taxes. My mortgage is paid off, thankfully!

You get a lot of advice here; sometimes you just gotta do what feels right to you. Pay it off, don’t pay it off… do what you think is right for your situation.

Save money to buy an investment; that interest rate should easily be outpaced.