These days, there's rarely a reason to rush to pay off your mortgage early. Paying down a loan with a 5.75% rate is the equivalent of earning 5.75% on your money, and you should be able to get a better return elsewhere.
| Row 0 - Cell 0 | Should I Pay off Debt or Save? |
| Row 1 - Cell 0 | How Advantageous are Extra Payments? |
| Row 2 - Cell 0 | Tapping Your Home Equity |
Money that you invest is also accessible. Paying more toward your mortgage may help you pay off the loan earlier, but perhaps not for a decade or longer. Meanwhile, you can't touch your money unless you borrow against your home equity or sell the house. "By investing the extra money, you have a pile of cash to draw on if you were to lose your job, for example," says Stuart Ritter, a financial planner with T. Rowe Price.
Putting additional money toward your mortgage makes more sense as you get close to paying off the loan -- especially if you're nearing retirement. "If you only have $20,000 or $40,000 left on the loan, paying it off will give you a psychological lift," says Michael Eisenberg, a CPA and financial adviser in Los Angeles.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Go back to our main list for more problems solved
Go to our slide show for other helpful tips
-
The Surprising Truth About Loneliness and LongevityWe've all heard about the epidemic of loneliness that can shorten lives and make retirement miserable. But there's more to the story.
-
The Dollar Index Is Sliding. Is Your Portfolio Prepared?The Dollar Index Is Sliding. Is Your Portfolio Prepared? The dollar's fall has been troubling because inflation appears to be constrained and the economy has been strong. Here's what it means for investors.
-
Amazon Resale: Where Amazon Prime Returns Become Your Online BargainsFeature Amazon Resale products may have some imperfections, but that often leads to wildly discounted prices.
-
Roth IRA Contribution Limits for 2025Roth IRAs Roth IRA contribution limits have gone up. Here's what you need to know.
-
How to Search For Foreclosures Near You: Best Websites for ListingsMaking Your Money Last Searching for a foreclosed home? These top-rated foreclosure websites — including free, paid and government options — can help you find listings near you.
-
Luxury Home Prices Rise as the Rich Dodge High Mortgage RatesLuxury home prices rose 9% to the highest third-quarter level on record, Redfin reports, growing nearly three times faster than non-luxury prices.
-
Four Tips for Renting Out Your Home on Airbnbreal estate Here's what you should know before listing your home on Airbnb.
-
Five Ways to a Cheap Last-Minute VacationTravel It is possible to pull off a cheap last-minute vacation. Here are some tips to make it happen.
-
How Much Life Insurance Do You Need?insurance When assessing how much life insurance you need, take a systematic approach instead of relying on rules of thumb.
-
When Is Amazon Prime Day? Everything We Know, Plus the Best Deals on Apple, Samsung and MoreAmazon Prime Amazon Prime Day is four days this year. Here are the key details you need to know, plus some of our favorite deals to shop during the sale.
