re: When does it make sense, mathematically, to accelerate mortgage payments?

I wouldn't think about early payoffs on mortgage less than 3%. That's gold right now.

If you aren't disciplined enough to invest the monies elsewhere now, what makes you think you will be disciplined enough to do anything productive when you stop paying your mortgage payment a month. And people forget, really, you're only not paying the P&I once you pay loan off. You still should be saving for taxes and insurance (don't get me started on savings not paying).

I don’t know your loan amount or potential extra payment amount so I can’t do the math, but go online and find an amortization calculator that lets you enter in extra payments and see how much you’ll save.

The difference between paying more towards a 6.5% loan vs putting it into a savings account earning 4.5% is not that much annually. Assuming you take the standard deduction, you’ll have to pay taxes on your savings account interest, so it decreases it even more.

Now, over the course of 30 years, it could be a 5 figure difference in total.

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BabyTac

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paid mine off 11 years ago when i was still young. LOL

everybody's situation is different.

some may not owe much. some may have high interest rates where it was not worth a refi with the small amount owed left. that was my situation.

if i had gotten into a new house later in life and had a cheap interest rate with note that was easily covered by my passive cash flow who gives a frick if they milk that note and use money to invest?

there are many different situations here.

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I am well aware that speeding up the homes at 4% and less is dumb. Is 6.5% high enough to speed up or should I just continue paying them, take advantage of the interest deduction in April, and keep maxing what I can into stocks?

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In my opinion, there is never a time that paying off your mortgage early is considered dumb.

When it is your highest interest debt and any other allocation of capital cannot generate a higher return than the interest expense.

I also factor in the risk. The mortgage paydown is guaranteed return. So let's say you have a 7% mortgage and you are comparing that to a 10% return from another use of capital. The 7% is guaranteed. So that also plays into my decision.

In similar vein to the “your payment is fixed while the dollar devalues”…a mortgage is arguably the best financial hedge to inflation that your everyday consumer can access.

The main factors I consider are:

Do you take standard deduction or itemize?

Do you have other interest-bearing debt? If so, what are the rates and interest deduction status (like student loan interest that you might be able to deduct on top of standard deduction, same re investment property interest)

Do you want to keep a certain amount of liquid assets on hand? If so then can you significantly offset the mortgage interest with high-interest savings or other income investments (short term CD, Treasury rate fund for example)?

Are you maxing out IRAs and other tax-beneficial investment vehicles? Do basic math on that v paying off mortgage.

How long do you plan to live in the current home?

I try to avoid purely psychological moves. And there can actually be liability benefits to having a bank holding a first-priority security- interest position in your home.

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I’m always amazed at older people that still have a mortgage. How is that possible?

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1. Some of us moved many times for career purposes and then moved home at retirement. Therefore the mortgage clock kept resetting. But that is only one part of a complicated series of factors

2. Looking at interest rates and the earning potential of our accounts was important. Our rate was low and we thought that future projected earnings from savings was good.

3. Then considering the cost of drawing the money out of those retirement accounts as a lump rather than spread out over time for tax reasons was another factor.

We chose to let the investment money earn more money and stick with the less than 4% interest loan.

Made sense then and makes even more sense now that interest rates have climbed while the home loan is low and stable as the investments are doing pretty well.

YMMV

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I'll give a different set of advice. There's 0 reason to pay the bank more than your payment until you can pay the entire thing. The bank having more of your money doesn't change your future payments. Better advice would be to put away money into an interest accruing account like a money market or investment account and save up until you can pay your mortgage off.

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I'm basically in the camp of, not only don't pay it off early, but try to get the very longest mortgage you can ever get.

Think of it this way: where else can you get 30 year debt, at low rates with no ability for the lender to make a margin call? Literally, all you have to do is make the same monthly payment year in and year out and there's nothing the lender can do to worsen your lot. PLUS, YOU retain the free option to refinance to a lower rate anytime you see fit. IMO, mortgages are mispriced in favor of the borrower.

Also, I just don't see the argument for feeling better about paying it down - it LOWERS your cash on hand. That seems LESS secure to me.