Hello! This guest post is from Melissa Brock, sharing her thought process about whether to pay off her mortgage.
Melissa Brock is a 12-year veteran of college admission, founder of College Money Tips and Money editor at Benzinga. She helps families navigate finances and the college search process.
Enjoy!
My husband and I like to make smart financial choices. He teases that I’m obsessed with money management — and admittedly, he’s not entirely wrong. I listen to personal finance podcasts, read widely about investing and personal finance, and work full time as the Money editor at Benzinga. All of that attention to money naturally makes me scrutinize our mortgage.
Our mortgage has often felt like a source of anxiety. On one hand, financial advice frequently recommends investing aggressively and paying only the mortgage minimum to take advantage of compound interest. That logic makes sense: why tie up cash in a non-liquid asset when the market has historically returned more?
On the other hand, many experts—and family members—advocate for paying off liabilities as soon as possible. There’s a deep comfort in thinking about eliminating a large monthly obligation forever. My dad, for example, preferred to make extra payments to get debt completely paid off whenever he could.
After many discussions, I’ll share what we decided to do and why.
Our story
Shortly after we married, my husband and I mapped out a 10-year plan. We are both planner-types and wanted to be intentional about the life we were building. One of the goals was to save to build a house — and I dreamed of a brand-new home so we wouldn’t need to renovate or compromise on layout.
We saved for eight years and eventually built a Craftsman-style home on three acres. The house was more than we might have purchased on a strict budget, but it fit our family and brought us joy. At the time, I wasn’t earning a high salary; I worked as an admission counselor and supplemented our income with freelance writing. That side hustle helped make the mortgage manageable and opened new career opportunities for me.
When the house was completed, we moved in on a cold December day and adjusted to a larger mortgage payment. We enjoyed the extra space, despite the longer commute and the temporary chaos of a new build.
Weighing the pros and cons of paying off our mortgage
For a while the mortgage was simply part of the monthly routine: the payment left our account and life continued. Then one day I started asking big questions about our future: Where are we headed? What do we want in retirement? What role should the mortgage play in those plans?
We debated for months, consulted advice, and even irritated each other along the way. Experts and friends offered conflicting guidance, and I vacillated between wanting peace of mind from being debt-free and following the numbers that favor investing.
Pros to paying off the mortgage
- Increased monthly cash flow once the mortgage payment is eliminated.
- The emotional relief and security of being debt-free.
- Potentially paying off the house before our children head to college, freeing funds for education or other priorities.
- Significant interest savings over the life of the loan if we aggressively reduce principal.
Cons to paying off the mortgage
- A large portion of wealth would be tied up in a non-liquid asset.
- Our mortgage rate is relatively low, while historical market returns (such as the S&P 500 long-term average) have been higher, suggesting investing could yield greater growth.
- We would forfeit any tax benefits from deducting mortgage interest.
- Paying off the house could make it harder to access cash quickly if an unexpected need arises.
Those core pros and cons framed our decision. There are other considerations that could apply to different households, but these were the most relevant to our situation.
Talking with professionals
We also sought guidance from financial advisors, including a large firm, to gather objective perspectives. Both advisors leaned toward investing rather than directing all extra cash at the mortgage. That approach appealed to my husband, who prioritized liquidity, college savings, and retirement accounts.
I remained uneasy because of the comfort that comes with being debt-free, and the “what if” scenarios that stick with nearly every parent: job loss, emergencies, or economic shocks. Ultimately, I knew I needed to choose a plan we could live with comfortably.
Our final decision
We settled on a hybrid strategy that blends both approaches:
- We increased our mortgage payment and specified that the extra amount go straight to principal. Directing additional payments to principal reduces interest paid over time and shortens the loan term.
- We continue to invest in the stock market to preserve liquidity and grow assets for future needs like college and retirement.
- We maintain a plan for a future mortgage payoff if our liquid assets grow to a level where paying chunks (or the balance) makes sense.
- We refinanced the mortgage when rates dropped to secure a lower rate and a shorter term, reducing interest costs and improving our path to payoff.
Tips for deciding whether to pay off your mortgage
I’m sharing our experience to help others decide without the prolonged anxiety we felt. Here are practical tips we learned.
Tip #1: Consider your needs, wants, and future priorities
Think about your comfort level with debt and your job stability. If peace of mind from being debt-free matters most, prioritize that. If you prefer higher potential returns and liquidity, leaning toward investing may be better. There’s no universal right answer—your decision should fit your situation and values.
Tip #2: Run the numbers
Look at your amortization schedule to see how additional payments affect principal and interest over time. Use calculators from your bank or other reputable sources to model scenarios: extra monthly payments, lump-sum prepayments, or refinancing. Also check whether your loan has any prepayment penalties; many mortgages do not, but confirm before committing.
Tip #3: Decide and revisit as needed
Make a plan you can commit to, knowing you can reevaluate later. Financial circumstances change—pay raises, career shifts, market movements, and family needs can all alter your priorities. Be proactive: you can always adjust your approach as your situation evolves.
Final wrap-up: Be confident in your choice
Do I still second-guess our decision sometimes? Yes. I’m naturally indecisive and these choices feel significant because they affect how we’ll live in the years ahead. But after weighing numbers, personal priorities, and professional advice, we chose a balanced strategy that aligns with our goals and provides both growth potential and a clear path toward eventual mortgage freedom.
Thoreau wrote, “Go confidently in the direction of your dreams. Live the life you have imagined.” That’s the aim: make a decision that supports the life you want and move forward with confidence.
Do you want to pay off your mortgage early?