Conventional wisdom says, "Don't pay off your
mortgage early." So are you foolish to consider an early payoff? Absolutely
not. By adding just $50 to $100 to your mortgage payment every month, you can
save thousands of dollars in interest, pay off your loan quicker, and eliminate
a major monthly expense.
The argument usually given against paying a mortgage early is that you
can make investments with your extra cash which pay higher returns, such as
mutual funds or stocks and bonds. This approach enables you to take the mortgage
interest deduction and have easy access to your money, in case you need it.
These are all definite pluses, but are not guaranteed savings results.
Any extra income which an investment might generate, over your home
equity appreciation, can be offset by a bad year in the investment market.
Investment earnings can virtually eliminate the income tax advantage of your
mortgage interest deduction, since stocks and bonds are likely to generate a
fair amount of dividends, interest income and capital gains.
It isn't as simple as conventional wisdom--consult your financial expert.