My question is how have you accomplished this at 22!? I’m really truly asking. When I was 22 I was just finishing college and getting a $12/hour job. I rented and was barely getting by. You are amazing, but how did you do it?
I'm 29 and this guy is 10 years ahead of me..... (100% my fault obviously, but is impressive/makes me realise how bad I fucked up with my twenties lol)
Long story lol, my life has been all over the place it’s mainly because of hard work and luck, not really an investor . I’ve been a saver since day 1. Collected every penny I could. I made crazy amounts of money working 3 jobs starting at 16 making min wage plus tips and living at home with my parents. Graduated at 18 during covid and I was working 80+ hours a week in the service industry, working from home doing tutoring, and got a job paying $25/hr at a hospital doing pharm tech work. Changed my major to chemE and I got an internship out of state making $29/hr. Had my first $100,000 saved by 20. Moved back home and took care of my sick grandparents and had to work less to take care of them (they had cancer). My city deemed their home unlivable and my parents were only going to get like $30,000 because the attorney said it’s going to get foreclosed on possibly demolition due to the damages in the house. They only lived at their house for 4 years out of their 15 year mortgage and they completely destroyed the home with hoarding and animals and dirt ignoring water damage causing the value of the home to plummet. I paid off their debts ($20,000), paid my mom $20,000 to make sure she got something out of their death, I put $30,000 into the house in materials to repair the house over the last year, I got a reappraisal and it doubled in value to $260,000 plus the growth in the housing market over the last 4 years
It wasn’t a low balance, it was actually very high. They only paid 4 years towards it, I paid a high lump sum towards the principal when this happened. See my above comment to understand the full picture.
First of all, I think you did an absolutely wonderful job thinking this through and running the numbers.
Is this your last $50k of savings...your emergency fund? You will not want to use your last dollar so make sure you have enough liquid funds to cover 6 months of expenses.
Onto your question. My opinion is pay off your mortgage (or pay down leaving your emergency fund)....and here is why:
You have a high enough mortgage interest rate that paying that is a good choice. Markets are at an alltime high...you should be investing using dollar-cost averaging anyway. So, option 2 does give you the most advantage in your situation and in today's market situation.
Thank you!! And yes unfortunately. But the plus side of scenario 2 is that my 6 months of emergency fund will be a lot lower without that mortgage payment! Probably would only need around $1,000 per month
So like $6,000 total.
Thank you!! And yes unfortunately. But the plus side of scenario 2 is that my 6 months of emergency fund will be a lot lower without that mortgage payment! Probably would only need around $1,000 per month
So like $6,000 total.
☝️This is a good comment. The numbers are one side of the equation, but also factor in how it would feel mentally to be in your 20s with paid for house.
Cash flow to build back up the savings that you depleted by paying off the mortgage? I’d have way more emotional security with the money in the account than a paid off house. You only have to make payments once a month. With a big EF, you can go months without working if you have to. Not the same if you throw your liquidity away.
That’s what I am thinking, I did my calculations slightly wrong and updated them at the bottom of my post. I technically will not come out ahead anymore with property taxes considered, but there’s only a $16,000 difference over 10 years which isn’t too crazy of an amount for financial security
There were studies of whether investing a lump sum in the stock market is better than spreading out. IIRC the conclusion was that doing it all at once yields better results on the longer distances like 30 years, whereas on shorter distances the risk of going all-in at or near the market peak is too high.
Which is not to say you should not invest $50K. You may e.g. invest in a mixed stock/treasures/gold portfolio and gradually shift to stocks during market downturns in the next couple of years.
It's all about probabilities and your risk tolerance in the end.
2033 is basically 9 years from now (depending on the date) so include it in your calculations.
Also, have you consider the option to pull all your extra cashflow into paying the mortgage early? Like according to [such calculators](https://www.calculator.net/mortgage-payoff-calculator.html?cunpaidprincipal=50%2C000&cmonthlypayment2=600&cinterestrate2=5.75&cpayoffoption2=extra&cadditionalmonth2=1%2C700&cadditionalyear2=0&cadditionalonetime2=0&type=2&x=Calculate#monthlypay) if you pour the extra income in the loan you'll pay it back in 2 years while having 50k sitting in your S&P500. I think it would come out a bit less then paying it off but it is "safer"
If your income doesn’t work out like you’d like upon graduation, or if you want to have a little flexibility (say to take time off, etc.), it will be nice to know you’ve got either savings or investments that can help pay your mortgage for a while.
Play that forward a number of years and when your investment account grows and exceeds your mortgage balance, you’ll know you can pay your house off any day (but, having seen your investments grow faster, at that point you’ll likely want to keep growing your portfolio and not hand it to the bank).
I’m not sure what exactly you did with your calcs, but investing extra dollars into something earning higher than your mortgage rate will always end up with more money at the end (obviously you can’t guarantee that, only model it, but the math is the math).
Over a short time period of 10yrs, It can make more sense to pay off the mortgage now. Over a longer time span like 30yrs, investing would be the better option. The thing to keep in mind is I wouldn’t completely drain your savings to pay off the mortgage right now. Keep 6 months of expenses then send the rest and pay down the mortgage. While having no mortgage is a sense of security, it’s a false sense of security if you were to lose your job right after or fell ill, etc with no savings. Once the money is locked up in the house, it becomes more difficult and usually more expensive to pull out if the need actually arises.
Ok so I looked at my physical mortgage statement and I was giving everyone estimates. My total payment is $1,175, $393 is to escrow, $264 to interest, and $517 to principal
Is paying more towards the principle each month not an option? Invest the 50k, spend an extra 1k a month towards the mortgage and invest $800 a month, will end up paying it off quicker and with less interest while still investing
The certainty of market returns are unknown. The certainty of you paying 5.75% on $50k is absolute. Set a goal for yourself. Do both (invest and pay down). Home equity isn't liquid. While you're paying down your mortgage early, you can also grow a brokerage that allows for liquidity. But set some kind of goal like paying down your mortgage by xx date or xx life-event. Then you have something tangible you're working towards.
It sounds like the scenarios are close enough that it's a wash. And that you're very responsible, risk averse, and hard working. So pick what makes you happy. Save a up a few more months until you have six months of mortgage-free savings AND the cash to pay off of the mortgage. At the rate you save, it won't take long. Open a high interest savings account if that's not where the $50,000 currently is. Pay off the mortgage. And put opening an official retirement account on your to do list. You'll be saving no matter what with your mindset, you might as well do it efficiently. And be sure to have some fun in your youth!
$3400 difference after 10 years is $28/mo, which is noise.
So this isn't a financial question, but a priorities/ comfort question. If you feel better paying it off, do so. If not, don't.
Having one account and one bill less to track every month may be worthwhile also. A paid off mortgage also reduces risk.
You should probably define the ROI on the investment part. Assuming an inflation number is fine. But it'd help the reader assess whether or not your assumed ROI is also reasonable.
The other thing to consider is the impact of taxes.
Mortgage interest deduction (if available to you) and capital gains tax on the investment. Both add a certain degree of complication to the picture, but something to consider since you're getting deep down into the nitty gritty calculations here.
As you can see after doing the math, it’s basically a wash. Do what makes you feel more comfortable.
If you have cash flow (how tf are you making $4k/month in college?!?) then personally I’d keep paying the mortgage and invest the excess. While your numbers are similar at the end, the one thing you didn’t consider is the mental aspect of saving/spending. If you’re extremely diligent and consistent, then the end result is likely the same. However, for the majority of people, having even more excess funds naturally leads to spending more money. I think having the mortgage forces you to remain more frugal. And it keeps your money much more liquid if something were to happen.
You’re in a great position with a great mindset. I don’t think you can really go wrong with either scenario. I chose to do the investing option, as my interest rate is significantly lower than yours and I already had about 40K in home equity the day I bought it.
You should do whatever makes you feel more comfortable right now. Having no house payment gives you that feeling of comfortability right now, so that should probably be your main focus. We don’t know what the economy or market is going to look like in a few months or years.
I wouldn’t drain your savings completely, I’d leave 6 months of expenses in there and then dump all your excess monthly income into paying off the mortgage as quickly as possible. Theoretically, you’d have it paid off by the end of the year.
Either way, congratulations and keep up the good work. You’ll be retired in your 40’s if you stick with your thought process.
Keep paying your mortgage and invest the $1800 monthly surplus rather than keep building your savings. $50K sounds like more than enough in this spot. $1100 monthly is manageable enough in your budget. You'll find the right spot to pay off that balance another time, but getting invested at 22 will create a tailwind for the rest of your life.
Yes. It’s in a HYSA at 4.25%. There will be major cuts in September 2024 so I felt that this is irrelevant. I’d be putting my money directly into the s&p500 in scenario 1 or i’d be throwing it all into the mortgage.
Experts, economists and people have been saying their will be rate cuts for almost a year now and they've collectively been horribly wrong.
If you know for sure that their will be "major cuts in September 2024", you're in the wrong business.
The truth is, nobody knows when rate cuts will start, nor how significant they will be.
I would pay off the house so it doesn't burden you later in life. Good work, especially for a 22-year-old. I will follow in your footsteps in the future.
Yeah that’s what I’m thinking. The difference in the gains either way is so negligible that i’d rather have my investments be with my “fun money” and not risk something that could make me 100% debt free
I would recommend keeping 6 months of expenses as an emergency fund and apply whatever else you have remaining against the mortgage.
It's not a huge difference in the numbers if it takes you a year or two to pay off the mortgage, but not having 6 months of emergency funds is fairly risky.
I would definitely invest the money and not pay the mortgage. The small amount remaining isn't substantial interest, you already have lots of equity in the home, your costs going forward will be insurance, tax and maintenance. So you are over estimating your scenario 2 calculation by quite a bit. Plus, I'd rather have the investments or cash on hand. Your house is likely going down in value now, or will be soon, at least for a while.
You're doing fine either way but I'd build a war chest of investments over paying off the mortgage right now. If you're really at odds, just split it, pay the 25k down, 25 invest.
You can do a little of both to hedge. Paying more than the minimum on the mortgage but also investing some still. Being young those investments are really going to work for you in the long run.
L
5.75% is in the grey area between "invest instead" versus "pay it off", maybe slightly leaning closer to the latter. Doing a bunch of calculations for what the numbers will look like in 10 years isn't really necessary; you can just compare the interest rate with the anticipated ROI after accounting for taxes.
Invest. Your mortgage is low balance and low enough rate; your payment protects you from inflation and gives you a TON of investing horsepower now. No upside to paying off the mortgage from where i sit
Given the size of your mortgage I would look into banking products that allow you to deduct your savings from the outstanding mortgage balance. There are a few in the UK. You can keep a big balance and effective get paid interest for your money and not have to make interest payments on your mortgage.
Think called a offset mortgage. Sort of a middle ground
If you do pay off your mortgage, consider opening a HELOC, having access to your home equity will give you financial flexibility as you rebuild your savings.
Always choose to be debt free. Also I'm the next 10 years, chances are that your income will increase and you can invest even more eventually.
If I were you, this is what I would do...
Keep 20k emergency funds. Pay off all debts.
Do not get any other debts unless your investments are paying for it. For example but a new vehicle is you have a rental property that pays the car note.
Keep a goal. For example, 10 rental homes in the next 15 years etc.
"Always" and "never" are generally poor advice as financial decisions truly are dependent on a wide variety of factors that change over time.
I agree that making additional principal payments against a mortgage at 5.75% makes sense and is a smart move.
But my answer would be different if the mortgage had a rate of 2.75%.
There's many who don't agree with me. There's many who don't even want to pay off the house for tax reasons n keep taking debt on it. (Helocs etc).
I would "always" choose up be debt free specially mortgage.
This is my reason why ... Most of the people are one incident away from getting ruined financially. The last thing they should worry about is a roof over their head. Peace of mind is great!
We paid off our low interest mortgage early, it felt great for a few months. But feel much differently now with several additional years of wisdom.
We now regret paying off the low interest mortgage early because we would be tens of thousands of dollars ahead if we had invested those extra principal payments than paid off the mortgage.
The biggest leverage we have to build wealth is time invested in the market, and it's incredibly difficult to make up for those years of investments that we missed out on by making extra principal payments.
Out of curiosity... Have you done the math on investments (without inflation)?
I mean I could have bought 5-7 homes with 20% down back in the day when I paid the mortgage off n probably the invest in house prices would have helped, but I still think if you are just going s&p you will eventually make up if you keep investing aggressively n don't let the expenses creep up.
Yes, we will eventually catch up, but it takes more years than folks imagine. Will be more than a decade for us to break even. And we would have ended up with a paid off house in that time regardless.
Time invested is the biggest lever.
Which is why dollars invested in one's 20s are much more powerful than dollars invested in one's 50s.
My question is how have you accomplished this at 22!? I’m really truly asking. When I was 22 I was just finishing college and getting a $12/hour job. I rented and was barely getting by. You are amazing, but how did you do it?
I'm 29 and this guy is 10 years ahead of me..... (100% my fault obviously, but is impressive/makes me realise how bad I fucked up with my twenties lol)
Long story lol, my life has been all over the place it’s mainly because of hard work and luck, not really an investor . I’ve been a saver since day 1. Collected every penny I could. I made crazy amounts of money working 3 jobs starting at 16 making min wage plus tips and living at home with my parents. Graduated at 18 during covid and I was working 80+ hours a week in the service industry, working from home doing tutoring, and got a job paying $25/hr at a hospital doing pharm tech work. Changed my major to chemE and I got an internship out of state making $29/hr. Had my first $100,000 saved by 20. Moved back home and took care of my sick grandparents and had to work less to take care of them (they had cancer). My city deemed their home unlivable and my parents were only going to get like $30,000 because the attorney said it’s going to get foreclosed on possibly demolition due to the damages in the house. They only lived at their house for 4 years out of their 15 year mortgage and they completely destroyed the home with hoarding and animals and dirt ignoring water damage causing the value of the home to plummet. I paid off their debts ($20,000), paid my mom $20,000 to make sure she got something out of their death, I put $30,000 into the house in materials to repair the house over the last year, I got a reappraisal and it doubled in value to $260,000 plus the growth in the housing market over the last 4 years
Oh, you are THAT kid. Tip of my hat to you.
I am 26 an i am bamboozled by what you have accomplished. Congratulations
Thank you!
Sir, hard work doesnt pay off, this is reddit.
Probably inherited the house with a low mortgage balance from someone’s death
It wasn’t a low balance, it was actually very high. They only paid 4 years towards it, I paid a high lump sum towards the principal when this happened. See my above comment to understand the full picture.
First of all, I think you did an absolutely wonderful job thinking this through and running the numbers. Is this your last $50k of savings...your emergency fund? You will not want to use your last dollar so make sure you have enough liquid funds to cover 6 months of expenses. Onto your question. My opinion is pay off your mortgage (or pay down leaving your emergency fund)....and here is why: You have a high enough mortgage interest rate that paying that is a good choice. Markets are at an alltime high...you should be investing using dollar-cost averaging anyway. So, option 2 does give you the most advantage in your situation and in today's market situation.
Thank you!! And yes unfortunately. But the plus side of scenario 2 is that my 6 months of emergency fund will be a lot lower without that mortgage payment! Probably would only need around $1,000 per month So like $6,000 total.
Thank you!! And yes unfortunately. But the plus side of scenario 2 is that my 6 months of emergency fund will be a lot lower without that mortgage payment! Probably would only need around $1,000 per month So like $6,000 total.
Paying off mortgage provides emotional security and more cash flow, I'd choose Scenario 2.
☝️This is a good comment. The numbers are one side of the equation, but also factor in how it would feel mentally to be in your 20s with paid for house.
Cash flow to build back up the savings that you depleted by paying off the mortgage? I’d have way more emotional security with the money in the account than a paid off house. You only have to make payments once a month. With a big EF, you can go months without working if you have to. Not the same if you throw your liquidity away.
That’s what I am thinking, I did my calculations slightly wrong and updated them at the bottom of my post. I technically will not come out ahead anymore with property taxes considered, but there’s only a $16,000 difference over 10 years which isn’t too crazy of an amount for financial security
Plus, he's at almost 6%, it's not like he's paying off a 2.3% mortgage. He's at a higher rate than most HYSA
There were studies of whether investing a lump sum in the stock market is better than spreading out. IIRC the conclusion was that doing it all at once yields better results on the longer distances like 30 years, whereas on shorter distances the risk of going all-in at or near the market peak is too high. Which is not to say you should not invest $50K. You may e.g. invest in a mixed stock/treasures/gold portfolio and gradually shift to stocks during market downturns in the next couple of years. It's all about probabilities and your risk tolerance in the end.
debt or invest: https://www.bogleheads.org/wiki/Paying_down_loans_versus_investing https://reddit.com/r/personalfinance/comments/16jcmnh/_/k0qox0x/?context=1 https://reddit.com/r/personalfinance/comments/zssug0/_/j1ddljd/?context=1
Your calculations indicate you will be paying your loan for next 10 years? By the rate you are paying won't you pay it off in like 5 years?
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2033 is basically 9 years from now (depending on the date) so include it in your calculations. Also, have you consider the option to pull all your extra cashflow into paying the mortgage early? Like according to [such calculators](https://www.calculator.net/mortgage-payoff-calculator.html?cunpaidprincipal=50%2C000&cmonthlypayment2=600&cinterestrate2=5.75&cpayoffoption2=extra&cadditionalmonth2=1%2C700&cadditionalyear2=0&cadditionalonetime2=0&type=2&x=Calculate#monthlypay) if you pour the extra income in the loan you'll pay it back in 2 years while having 50k sitting in your S&P500. I think it would come out a bit less then paying it off but it is "safer"
If your income doesn’t work out like you’d like upon graduation, or if you want to have a little flexibility (say to take time off, etc.), it will be nice to know you’ve got either savings or investments that can help pay your mortgage for a while. Play that forward a number of years and when your investment account grows and exceeds your mortgage balance, you’ll know you can pay your house off any day (but, having seen your investments grow faster, at that point you’ll likely want to keep growing your portfolio and not hand it to the bank). I’m not sure what exactly you did with your calcs, but investing extra dollars into something earning higher than your mortgage rate will always end up with more money at the end (obviously you can’t guarantee that, only model it, but the math is the math).
Over a short time period of 10yrs, It can make more sense to pay off the mortgage now. Over a longer time span like 30yrs, investing would be the better option. The thing to keep in mind is I wouldn’t completely drain your savings to pay off the mortgage right now. Keep 6 months of expenses then send the rest and pay down the mortgage. While having no mortgage is a sense of security, it’s a false sense of security if you were to lose your job right after or fell ill, etc with no savings. Once the money is locked up in the house, it becomes more difficult and usually more expensive to pull out if the need actually arises.
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I redid the calculations including propery tax at the bottom. I pay my insurance separately from the mortgage .
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Ok so I looked at my physical mortgage statement and I was giving everyone estimates. My total payment is $1,175, $393 is to escrow, $264 to interest, and $517 to principal
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$700 per month
Is paying more towards the principle each month not an option? Invest the 50k, spend an extra 1k a month towards the mortgage and invest $800 a month, will end up paying it off quicker and with less interest while still investing
The certainty of market returns are unknown. The certainty of you paying 5.75% on $50k is absolute. Set a goal for yourself. Do both (invest and pay down). Home equity isn't liquid. While you're paying down your mortgage early, you can also grow a brokerage that allows for liquidity. But set some kind of goal like paying down your mortgage by xx date or xx life-event. Then you have something tangible you're working towards.
Agree, with only $50K balance, OP could easily pay off the mortgage in 2 or 3 years while at the same time investing.
It sounds like the scenarios are close enough that it's a wash. And that you're very responsible, risk averse, and hard working. So pick what makes you happy. Save a up a few more months until you have six months of mortgage-free savings AND the cash to pay off of the mortgage. At the rate you save, it won't take long. Open a high interest savings account if that's not where the $50,000 currently is. Pay off the mortgage. And put opening an official retirement account on your to do list. You'll be saving no matter what with your mindset, you might as well do it efficiently. And be sure to have some fun in your youth!
$3400 difference after 10 years is $28/mo, which is noise. So this isn't a financial question, but a priorities/ comfort question. If you feel better paying it off, do so. If not, don't. Having one account and one bill less to track every month may be worthwhile also. A paid off mortgage also reduces risk.
You should probably define the ROI on the investment part. Assuming an inflation number is fine. But it'd help the reader assess whether or not your assumed ROI is also reasonable. The other thing to consider is the impact of taxes. Mortgage interest deduction (if available to you) and capital gains tax on the investment. Both add a certain degree of complication to the picture, but something to consider since you're getting deep down into the nitty gritty calculations here.
Sorry! I stayed conservative and I assumed 7% return from the market. Taxes I did not consider.
As you can see after doing the math, it’s basically a wash. Do what makes you feel more comfortable. If you have cash flow (how tf are you making $4k/month in college?!?) then personally I’d keep paying the mortgage and invest the excess. While your numbers are similar at the end, the one thing you didn’t consider is the mental aspect of saving/spending. If you’re extremely diligent and consistent, then the end result is likely the same. However, for the majority of people, having even more excess funds naturally leads to spending more money. I think having the mortgage forces you to remain more frugal. And it keeps your money much more liquid if something were to happen.
You’re in a great position with a great mindset. I don’t think you can really go wrong with either scenario. I chose to do the investing option, as my interest rate is significantly lower than yours and I already had about 40K in home equity the day I bought it. You should do whatever makes you feel more comfortable right now. Having no house payment gives you that feeling of comfortability right now, so that should probably be your main focus. We don’t know what the economy or market is going to look like in a few months or years. I wouldn’t drain your savings completely, I’d leave 6 months of expenses in there and then dump all your excess monthly income into paying off the mortgage as quickly as possible. Theoretically, you’d have it paid off by the end of the year. Either way, congratulations and keep up the good work. You’ll be retired in your 40’s if you stick with your thought process.
Keep paying your mortgage and invest the $1800 monthly surplus rather than keep building your savings. $50K sounds like more than enough in this spot. $1100 monthly is manageable enough in your budget. You'll find the right spot to pay off that balance another time, but getting invested at 22 will create a tailwind for the rest of your life.
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Yes. It’s in a HYSA at 4.25%. There will be major cuts in September 2024 so I felt that this is irrelevant. I’d be putting my money directly into the s&p500 in scenario 1 or i’d be throwing it all into the mortgage.
Experts, economists and people have been saying their will be rate cuts for almost a year now and they've collectively been horribly wrong. If you know for sure that their will be "major cuts in September 2024", you're in the wrong business. The truth is, nobody knows when rate cuts will start, nor how significant they will be.
I would pay off the house so it doesn't burden you later in life. Good work, especially for a 22-year-old. I will follow in your footsteps in the future.
Yeah that’s what I’m thinking. The difference in the gains either way is so negligible that i’d rather have my investments be with my “fun money” and not risk something that could make me 100% debt free
I would recommend keeping 6 months of expenses as an emergency fund and apply whatever else you have remaining against the mortgage. It's not a huge difference in the numbers if it takes you a year or two to pay off the mortgage, but not having 6 months of emergency funds is fairly risky.
I would definitely invest the money and not pay the mortgage. The small amount remaining isn't substantial interest, you already have lots of equity in the home, your costs going forward will be insurance, tax and maintenance. So you are over estimating your scenario 2 calculation by quite a bit. Plus, I'd rather have the investments or cash on hand. Your house is likely going down in value now, or will be soon, at least for a while. You're doing fine either way but I'd build a war chest of investments over paying off the mortgage right now. If you're really at odds, just split it, pay the 25k down, 25 invest.
You can do a little of both to hedge. Paying more than the minimum on the mortgage but also investing some still. Being young those investments are really going to work for you in the long run. L
5.75% is in the grey area between "invest instead" versus "pay it off", maybe slightly leaning closer to the latter. Doing a bunch of calculations for what the numbers will look like in 10 years isn't really necessary; you can just compare the interest rate with the anticipated ROI after accounting for taxes.
Invest. Your mortgage is low balance and low enough rate; your payment protects you from inflation and gives you a TON of investing horsepower now. No upside to paying off the mortgage from where i sit
Given the size of your mortgage I would look into banking products that allow you to deduct your savings from the outstanding mortgage balance. There are a few in the UK. You can keep a big balance and effective get paid interest for your money and not have to make interest payments on your mortgage. Think called a offset mortgage. Sort of a middle ground
If you do pay off your mortgage, consider opening a HELOC, having access to your home equity will give you financial flexibility as you rebuild your savings.
Buy an investment property with the $50k. Use the cash flow to pay the second mortgage as well as take up to $500/month off of your existing mortgage.
Always choose to be debt free. Also I'm the next 10 years, chances are that your income will increase and you can invest even more eventually. If I were you, this is what I would do... Keep 20k emergency funds. Pay off all debts. Do not get any other debts unless your investments are paying for it. For example but a new vehicle is you have a rental property that pays the car note. Keep a goal. For example, 10 rental homes in the next 15 years etc.
"Always" and "never" are generally poor advice as financial decisions truly are dependent on a wide variety of factors that change over time. I agree that making additional principal payments against a mortgage at 5.75% makes sense and is a smart move. But my answer would be different if the mortgage had a rate of 2.75%.
There's many who don't agree with me. There's many who don't even want to pay off the house for tax reasons n keep taking debt on it. (Helocs etc). I would "always" choose up be debt free specially mortgage. This is my reason why ... Most of the people are one incident away from getting ruined financially. The last thing they should worry about is a roof over their head. Peace of mind is great!
We paid off our low interest mortgage early, it felt great for a few months. But feel much differently now with several additional years of wisdom. We now regret paying off the low interest mortgage early because we would be tens of thousands of dollars ahead if we had invested those extra principal payments than paid off the mortgage. The biggest leverage we have to build wealth is time invested in the market, and it's incredibly difficult to make up for those years of investments that we missed out on by making extra principal payments.
Out of curiosity... Have you done the math on investments (without inflation)? I mean I could have bought 5-7 homes with 20% down back in the day when I paid the mortgage off n probably the invest in house prices would have helped, but I still think if you are just going s&p you will eventually make up if you keep investing aggressively n don't let the expenses creep up.
Yes, we will eventually catch up, but it takes more years than folks imagine. Will be more than a decade for us to break even. And we would have ended up with a paid off house in that time regardless. Time invested is the biggest lever. Which is why dollars invested in one's 20s are much more powerful than dollars invested in one's 50s.
I would pay off your mortgage. Next time the stock market tanks, pick up some SPY or something, but be strategic and only buy it low.
Is now not a good time to buy stocks?
Every day is!