ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Pay Your Mortgage off Early?

Updated on August 23, 2020

Is All Debt Bad Debt?

People frequently wonder if it makes sense to pay off a home early. Financial experts recommend that people avoid debt when at all possible. While not all debts are created equal, no debt is a wonderful thing to have on one's personal balance sheet as a liability. Paying off debt is a great idea. There is no question about this principal--pun intended.

Actually, avoiding all debt is best. Those who have less debt have less to worry them, and less stress is always a good thing. There are debts that are better than others. That cup of Starbucks is not exactly necessary, and using a credit card for the purchase without paying it off before the end of the grace period will case that coffee to cost much more than it would had a person paid cash. This would be an example of very bad debt.

Debt for a house, on the other hand can actually make sense. In many parts of the country, it is actually cheaper to have a mortgage payment than it is to rent. Therefore, if a person is planning to stay in an area for a few years, it makes sense to buy if the monthly payment is cheaper than rent. Renters have no equity when they leave, those who are buying can often cash out when they sell if they are not underwater on their loans. Therefore, debt can make sense when buying a house.

Another benefit of buying over renting involves the mortgage interest tax credit. Mortgage interest is deductible when calculating income tax. This definitely helps those who have enough deductions to itemize. For example, if an individual or family pays $15,000 in mortgage interest, they can itemize and deduct $15,000 from their income. This reduces the cost of buying a house by reducing the amount of tax due.

Pay Off Your Mortgage By 50

Save Money

Save Money by Paying off a Mortgage Early?
Save Money by Paying off a Mortgage Early? | Source

Should You Pay off a Mortgage Early?

The answer to this question is--drum roll, please--maybe. There are instances in which it might not be advisable to start paying additional funds on a mortgage. So, what are these instances of which I speak?

Pay off credit card debt first. Credit cards tend to have much higher interest rates than do mortgages. In fact, unsecured debt tends to have higher interest rates than just about any debt. If you have enough money to pay extra on a bill, it should definitely go toward paying off the credit card bills. Start with the smallest outstanding balance if you have multiple accounts, and after that one is paid off, start on the next, and the next, ad infinitum, ad nauseum.

Other debts that have interest payments and that have no tax benefits should be paid next. This would include such debts as those incurred for automobiles, motorcycles, boats, RVs, etc. While these are often taken out at lower rates than credit card debt, they do not have the tax benefits of the mortgage interest tax deduction.

After all of these debts listed above are paid off, it then makes sense to pay off the mortgage early. There is, of course, the possibility that Congress could do away with this tax credit in the future. If and when that happens, it may be time to re-think this strategy. Until that time, however, it is a smart idea to pay off your mortgage early. It's a smarter move to pay off all of your other debts to banks earlier, because of the mortgage interest tax benefit, especially if it's large enough to allow for itemization.

What Debt Should You Pay Off First?

What debt should you pay off first?

See results

Benefits of Paying Off a Mortgage Early

There are some benefits of paying off a house early. The first benefit is not having a house payment. Even the cheapest mortgage payments tend to be in the hundreds of dollars. Those who own larger houses can pay into the thousands or tens of thousands in mortgage payments. Say for example that your monthly house payment is $1,000. Paying off the mortgage automatically increases disposable income by $1,000 per month, less any expenses that may be in escrow, such as fire or flood insurance.

The second major benefit of paying off a mortgage early is less stress. With the additional disposable income, it will be easier to take a nice vacation or save more money for retirement. Less stress can often lead to better health.

The third major benefit of ditching a mortgage payment is that this can lead to a substantial savings in interest expense. Today, mortgage rates are basically at an all-time low. Regardless, an early pay-off will allow you to quit paying this interest, as well. Homeowners can save tens or hundreds of thousands in interest expense, depending upon how much their mortgage is and how early they pay it off.


This website uses cookies

As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

Show Details
HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
LoginThis is necessary to sign in to the HubPages Service.
Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
AkismetThis is used to detect comment spam. (Privacy Policy)
HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
MavenThis supports the Maven widget and search functionality. (Privacy Policy)
Google AdSenseThis is an ad network. (Privacy Policy)
Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
Index ExchangeThis is an ad network. (Privacy Policy)
SovrnThis is an ad network. (Privacy Policy)
Facebook AdsThis is an ad network. (Privacy Policy)
Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
AppNexusThis is an ad network. (Privacy Policy)
OpenxThis is an ad network. (Privacy Policy)
Rubicon ProjectThis is an ad network. (Privacy Policy)
TripleLiftThis is an ad network. (Privacy Policy)
Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)
ClickscoThis is a data management platform studying reader behavior (Privacy Policy)