Should you pay off your mortgage?


Quick Answer

The wisdom of paying off a mortgage depends on an individual's personal situation as well as unknowable future events, such as the movement of interest rates and stock prices. A balanced approach is best, and it is always preferable to pay off higher interest debt first.

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Full Answer

To find the best answer to this question it is necessary to look at a person's financial situation, tax situation and other factors. If, in the future, interest rates remain low and stock market returns high it is wise to invest in the stock market instead of paying off a mortgage. If interest rates rise and stock markets turn lower, it may not be so wise. Future interest rate and stock market moves are most likely to fall somewhere in between these extremes. A balanced approach would be to pay off one dollar of mortgage debt per one dollar invested in a retirement account.

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