Spend some time in the personal finance blogging world, and it won’t be long before you hear the debate: is it better to pay off your mortgage ahead of schedule or keep one forever?
Those in the pro-pay off the mortgage camp talk about the sense of relief you get when you don’t owe money to anyone, the sense of satisfaction you get when the house is really your own, the extra money you have each month because you’re not sending it to the mortgage, and the guaranteed return on your money.
Those in the keep-the-mortgage camp talk about tax deductions, the opportunity to earn a greater return on the money in the market, the opportunity to borrow even more money against the home (via a home equity loan) for still greater investments in the market, and how little effect paying off the mortgage will have on their day-to-day finances anyway.
The thing is, it’s not an either-or world. You can do things in moderation too. You can keep the mortgage for awhile, and eventually pay it off. You can pay it off on an accelerated plan, but also invest moderately. You can do a combination of things that best suits your individual plan.
That’s what most people forget — there’s no “right” answer; there’s only what’s the most right for you. Our personal plan is to pay off our mortgage within the next 3 years, while investing and building up savings in the meantime. And that tax deduction thing? We don’t get it anyway, so it’s not a factor. We’ve chosen to take a more moderate approach, one that best suits us and our own personal financial outlook.