Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
For you this is a judgement call, and your comfort level is a major factor, regardless of the numbers.

Your mortgage rate is 5.25%. If it was much higher, I'd say yes, pay it off, or at least refinance it. If you were a point lower, and not with an ARM, I'd be inclined to keep the mortgage in place and invest the money elsewhere. I'd be scared to have an ARM these days though. Rates are going up and likely to keep doing so.

By paying it off, you do two things:
1. You have a locked-in guaranteed return of 5.25% on the principal paid off. Compared to whatever else you might have done with it, that may not be real exciting. But it beats government bonds, and who knows what the stock market will do?

2. It eliminates the mortgage payment from your monthly budget. To most people at the stage they enter retirement mode, that can be a big deal psychologically, if nothing else.

Really, it's your call.

Bill
Print the post  

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.