Skip to main content
No. of Recommendations: 0
I just received $90,000 from an insurance policy. I now have enough to pay off my house which is worth roughly $300,000, but most of my savings would be depleted. I have a 20 year mortgate @ 6.625% with about 17 years remaining. I have been making additional payments of $100 per month towards principle. Although I have been making some good gains the past two years in the market, I wonder if it makes more sense to pay off the house or keep investing? I know my luck won't hold out forever in the market, whereas I will have a certain peace of mind being debt free. I am married with no children, I am 42 and my wife is 39. I am currently contributing to a 401K and a Roth IRA. I fully realize that I will lose the tax benefits if my house is paid off. Any suggestions?

I wouldn't deplete your savings to completely pay off the house. You should keep a 6 month emergency fund. After that, it is personal choice. Some people prefer the guaranteed return of paying down the mortgage. Others prefer to invest to try to get a higher return than their mortgage.

Your mortgage rate is higher than current rates. Bankrate is listing the 15 year mortgage at 4.67%. If you prefer the higher risk path, you could refinance your 20 year mortgage to a new 15 year mortgage and then invest in the stock market to try to get higher returns.

Pay off the house, invest, or refinance and invest. Do whatever that allows you to sleep at night.


Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
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.