When it doesn't make sense to pay off your mortgage
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- Опубліковано 12 тра 2024
- According to Freddie Mac, the average 30-year fixed mortgage rate is holding steady above 7%. When interest rates are high, some borrowers may choose to pay down the interest portion of their monthly payments, but that also comes with risks.
Bankrate Chief Financial Analyst Greg McBride joins Wealth! to give insight into what high interest rates mean for paying down a mortgage.
McBride offers advice to those close to paying off the balance of a mortgage: "Let's say you're getting down toward the end of that mortgage. You're down to your last 10 or $20,000 on the balance, and you're a couple of years away from retirement. In that sense, stepping up the payments can make a lot of sense because what you're going to do is you're going to completely eliminate that payment before you retire, giving you a quick return on investment, drastically reducing your expenses and retirement."
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Don’t listen to the crooks. The only way to avoid bankruptcy is to avoid debt. The more debt you have the closer you get to bankruptcy. Pay off your house asap, before even investing in stocks and bonds. You won’t regret it
100% agreed.
No. It really seriously DOES DEPEND how much interest you’re paying on your mortgage. If you have a pile of extra cash and you stand to get much greater returns from investing it than the money you’d save on interest payments, I mean, that’s pretty darn simple math…
@@CoryPchajek 80% of mortgages to be renewed in 2024 at 5%+. Having a mortgage subjects you to the fluctuating decisions of the federal reserve. In the 80’s, interest rates reached 20%. Paying 2% was a 5 year thing for most people and its an unrealistic interest rate going forward. If you have loans but invest anyways you are using leverage and a sudden downturn in the market will kill the return. Also investing the extra after paying a mortgage vs putting the would be mortgage payment into investing yields significantly different results, where the debt free way gets to the 1 million mark sooner than the leveraged way in most cases. Telling the general population debt and leverage is good in a rising interest rate environment is a recipe for disaster . If we could all trade stocks in hindsight we would all be billionaires. For the average person leverage is a terrible idea…
@@Knowledge.to_Come 10% expected returns in stocks vs 3.625% for my mortgage. As much as my biases push me to pay off the mortgage, I keep putting money in the market instead
You will never regret paying off your debt.
Pay off the mortgage as soon as you can and certainly before you retire.
Those glasses look too much.