Paying off your mortgage has been a monumental goal for decades now. But is it the right thing to do in the 21st century?
Debt Is Not Always Bad
There is a big difference between good debt and bad debt when it comes to debt. Mortgages are considered good debts because they are fixed and typically have low interest.
Reason #1: You Can Get a Tax Break On The Interest
The interest you pay on your mortgage is usually tax-deductible. This deduction can amount to significant savings, especially if you are in a higher tax bracket.
Reason #2: There Is Potential for Higher Returns Elsewhere
Other investment opportunities will provide a better return than paying off your mortgage early.
Reason #3: You May Have Other Debt With a Higher Interest Rate
You may be carrying other debt with a higher interest rate than your mortgage. Pay off this debt before aggressively paying down the mortgage.