Is it better to invest or pay off your mortgage early?

Technology
Is it better to invest or pay off your mortgage early?

mortgage_20070604.jpg
There’s a huge discussion happening both on Lifehacker and Get Rich Slowly regarding the pros and cons of paying off a mortgage early. Contrary to my own assumptions, the numbers (assuming current interest rates around 6%) seem to strongly encourage investing your money instead of paying toward your mortgage’s principal.

On the one hand, you get a guaranteed outcome with paying down your mortgage. On the other, a conservative rate of return on an index fund should have no problem beating a 6% rate over the next 30 years. With the variability in people’s risk-comfortability, there is no right answer here, but it’s informative to hear the personal finance hackers weigh in with their opinions.

Are there any economists in the room that can explain how it’s currently cheaper to borrow money and invest it elsewhere rather than to pay off debts? Why would a mortgage company ever lend money in this scenario?

Ask the Readers: Is It Better to Invest or to Prepay a Mortgage? – Link
Pay off your mortgage more quickly to save money – Link
DIY Mortgage Acceleration – Link

3 thoughts on “Is it better to invest or pay off your mortgage early?

  1. BrentEvans says:

    Statr is an excellent way to track stats. It is one of the Four ways I use to track you Flickr Stats
    Brent

    Four ways I know of to track you Flickr Stats

Comments are closed.

Discuss this article with the rest of the community on our Discord server!
Tagged

ADVERTISEMENT

Maker Faire Bay Area 2023 - Mare Island, CA

Escape to an island of imagination + innovation as Maker Faire Bay Area returns for its 15th iteration!

Buy Tickets today! SAVE 15% and lock-in your preferred date(s).

FEEDBACK