Should I pay off my mortgage early?

Answer

It’s a great idea to pay off a mortgage early, but there are reasons not to as well. You can write off mortgage interest you pay on your taxes, for one. And you might wish to put extra money you have into a savings account instead of toward the mortgage. But paying off a mortgage means you won’t have to pay interest anymore, and that can save you a lot of money.

Example

For example, say you have a mortgage of $120,000 with a 5% interest rate and a monthly payment of $644. That means you pay $7,728 a year. If you multiply that by 30 years (a typical mortgage loan term), you get $231,840. And that is much more than $120,000. So the faster you pay off your mortgage the more you save on interest.

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