I’ve noticed many people in this community discuss their mortgages while focusing on quickly paying down higher-interest debts like student loans and credit cards.
I managed to pay off my student loans, which had an average interest rate of about 4.5%. Now, I have a mortgage with a rate of 4.9%. Given my experience with lower-interest debt, I’m beginning to feel that my mortgage should be treated similarly to high-interest debt, prompting me to consider paying it down more aggressively rather than funneling money into post-tax accounts.
What advice would you provide if you were in my position? What mortgage interest rate would prompt you to prioritize aggressive repayment, and how intense would that strategy be?
Hey Eth_91Skate, while a 4.9% mortgage rate isn’t crazy high, it’s not super low either. I think if your rate was over 5.5%, that’d be a real trigger to accelerate payments. But remember, having a cash cushion or investing might give u better long-term gains. Balance is key.
I would consider accelerating mortgage payments if the rate exceeds what you might earn in safe investments, like bonds or indexes. With a 4.9% interest rate, it might be close. If your mortgage was in the 6% range, it becomes more compelling to aggressively pay it down. However, it’s essential to evaluate your overall financial goals and current assets. Prioritizing emergency savings and securing investments in tax-advantaged accounts can sometimes offer better financial stability and returns.