It would be nice if I didn’t have to worry about a mortgage any more. It’ll be a loooong time before I have more money than I need.
if given someone who unjudiciously spends money, then I agree that paying off a house is a fantastic way to save (versus fancy car, excessive holidays). But this is a psychological battle, and has relatively little to do with finance.
Critically, many people have very little diversification and instead they only have two financial instruments: their job and their home. Investing money in a third instrument (equivalant to retirement savings?) instead of paying off principal should make sense if expected returns are similar to mortgage rates.
For those that have the skill and strength to invest carefully, the equation simplifies down to comparing your mortgage rate versus your expected investment returns. If investment returns exceed interest costs, then not paying principal and instead investing, is the prudent thing to do. There are other life circumstances that affect expected returns e.g. age and capacity to deal with market volatility.
The cliché that you should pay off mortgage principal before anything else is mindless, and may come from the past when interest rates were higher?
nod I did not say what was in my brain which I followed up in another comment; it's all about time scale - if your plan is meager (+$100/mo) you only shave 5y off your final loan cost, which could probably be beat with a mutual fund instead. If your plan is aggressive (pay off in 5y) the return on investment for the following 25y using the full "mortgage payment" works out (money makes money) - but you must be disciplined and determined.
Edit: also just to share, I completely underestimated the reduction in cost of living which happened when I moved from a location where houses were very expensive to somewhere much more modest ($$$) but same type of community (nice street, nice neighbors, low crime, etc.). I ended up saving a lot of extra money by accident in just regular life things which I was able to roll over into the extra payoffs. I feel this accident in my math helped work in my favour very significantly to my overall plan, it took me a bit of "where is this extra money coming from?" reflection to realize my initial mistake in the plan. This could of course cut both ways, should you move into a more expensive community with a higher cost of living in your new house.
> even shaving 10 years off that time frame will net you a lot back in your pocket to invest and make money on it
what about just investing it in the first place instead of paying down extra on the mortgage?
why pay extra on 3% (or less!) debt to free up cash flow to use for some ~6-10% investment when you can just take the extra from step 1 and skip right to step 2
It possibly would have been better long term to invest it but the peace of mind a low monthly payment brings is really nice.
If I can gather another largish chunk of money I’ll definitely be looking to get rid of the mortgage completely.
While it might not have been the best long term move you never know what the future will bring and also I think having that feeling of freedom right now counts for a lot too.
+1, and if you've ever been evicted from a rental/lease for capricious reasons dreamed up by a landlord who just wants you out so they can raise the rent, the peace of mind of "I can't be kicked out of this house, and nobody can take it away from me for failure to make a mortgage payment" is part of my life experience and feelings. "No HOA" was a hard requirement when I was house shopping.
Maybe just before the election isn't the best time to invest though.
Home ownership (especially for $500k+) is heavily subsidized in the USA.
Of course I did, that's the whole point to me. Moving to a location with a nice quality/standard of living with housing available far below my income so that it's not a financial burden. Everyone has a different goal - a small, modest house in a nice place to live is all many of us ask. And not being in debt.
> Home ownership (especially for $500k+) is heavily subsidized in the USA
A really nice house (nicer than mine for sure, even a brand new build) here is 250k. 500k buys a lot of house here (miniature mansions in some places), there are plenty of nice places to live in the USA for 150-250k. I just checked Zillow, where I grew up half way across the country (where parents still live) is the same prices as here. Not everyone lives in an overly expensive housing market or wants a massively large house/land.