🏡Don’t Pay Down Your Mortgage

It may seem tempting to throw any extra cash you have (thank you, bonus!) at your mortgage. After all, owning your home outright sounds amazing. But before you do, let’s look at whether it’s really the smartest financial move for you.

Financial experts often recommend other strategies unless you’re nearing retirement. Let’s set aside the emotional relief of paying off your mortgage and focus on the numbers. Here are 8 things to consider before putting extra money toward your loan:

1️⃣ Your Monthly Payment Won’t Change Unless You Refinance
Paying down your mortgage early won’t lower your monthly costs unless you refinance or recast the loan. Otherwise, you’re just shortening the payoff timeline.

2️⃣ Paying More Doesn’t Increase Your Home’s Value
Your home’s resale value stays the same whether you pay down your mortgage or not. That extra money could grow more if invested elsewhere.

3️⃣ Keep Cash Accessible
Once you put money into your mortgage, it’s not easily available. Having a healthy emergency fund—at least 6 months of living expenses—is a priority.

4️⃣ Max Out Other Parts of Your Financial Portfolio First
Your home is one part of your financial plan. Make sure retirement contributions, emergency savings, and other investments are prioritized.

5️⃣ Pay Off Higher-Interest Debt First
Credit cards, car loans, and other high-interest debts should be tackled before putting extra money toward a low-rate mortgage.

6️⃣ Look for Better Returns
With today’s mortgage rates, you may earn more by investing in stocks, bonds, or other opportunities. Consult your financial advisor to see what makes sense for you.

7️⃣ Don’t Forget Tax Benefits
Mortgage interest can be deductible—especially valuable if you’re early in your mortgage or not near retirement.

8️⃣ Consider Your Homeownership Plans
If you plan to move soon, extra mortgage payments may not make sense. Keeping cash on hand can help with your next home purchase.

When Does Paying Down Your Mortgage Make Sense?
If you’re approaching retirement and want to be debt-free, paying down your mortgage early can bring peace of mind—even if it’s not the strongest financial move. Sometimes better sleep at night is worth more than a few percentage points.