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Comment by xienze | Hacker News Reader

Well, if it makes you feel better, he probably made a bad decision paying off the mortgage right away considering that he has no idea what he's going to do to earn money going forward. It would have been better to continue paying the mortgage for the time being (interest rates are absurdly low) and have a big cushion to fall back on if the whole "I don't wanna be part of the rat race, maaaan" thing doesn't work out.

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I crunched some numbers, and the difference came out to losing a couple grand a year over the course of a decade by paying it off now. I decided I'd rather have fewer bills and no debt looming overhead while I figure this out than the slight extra cash.

I don't doubt that it saves you money in the long run, but my point is if you're planning on not working and not making real money for a very long time you're better off with the mortgage and a LOT more cash laying around.

I think you can probably do better investing than in paying off a mortgage, depending on when you got in on the mortgage rate. Plus, yes, you have that money more liquidated when you need it. (Plus mortgage interest is tax deductible).

Mortgage is tax deductible if you are itemizing, which most people in the US do not. He's almost certainly not going to be itemizing if he doesn't have an income any more.

Additionally, you probably can do better investing, but we don't know when he took out his mortgage. I got a mortgage in 2000 and the rates were much higher. A guaranteed 6.5% return on my investment? Not too bad. Refinancing can be expensive, and depending on what remains on the mortgage it may not be worth it.

So really, it's almost impossible to speculate on whether paying of the mortgage was a good idea until we know more of the details. I admit I would be inclined to pay it off just for the certainty and the immediate lowering of expenses. Investing can take time to return, possibly more time than he has.

I agree with you but on the existential side of things not having that mortgage payment hanging over you every month is quite liberating.

Yes, assuming you also have a job. Having no job (and no desire to get a job) and little savings (the author says it almost all went to paying off the mortgage) is a little stressful, to say the least. In this situation having a big pile of cash and a mortgage would be preferable.

I do also have some pre-existing savings; I just don't want to use them if at all possible (and have to start all over, sob), so I've been deliberately pretending they're unavailable.

I understand what you're saying, but a technical note: you say "start all over," but I think that is untrue. You would be starting from the position of having no debt and owning your home outright (a positive net worth.) That's an excellent position to be in, in terms of trying to build savings. Congrats on the mortgage! :)

You need to account for risk in your calculation, since investing in stocks or bonds is risky, but paying off a 4% mortgage gets you a risk-free 4%. Show me any other risk free investment out there that's that high.

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