You might enjoy owning your home – but the mortgage? Not so much. In fact, you might want to do everything you can to pay it off as quickly as possible. But is that always the best strategy?
In one sense, your mortgage can be considered a “good” debt because it’s backed by a tangible asset – your home – that has real value and may even gain further value. Furthermore, by historical standards, you’re probably paying a pretty low interest rate on your mortgage, so you’re getting a lot of benefit – a place to live and a potentially appreciating asset. And if you itemize on your taxes, you can possibly deduct some, or maybe all, of your mortgage interest.
Nonetheless, despite these benefits, a mortgage is still something you have to pay, month after month and year after year. And for some people, it may feel good to pay it off. After all, there may well be a psychological benefit to being free this long-term debt. But is it really in your best financial interest to make extra payments?
