Should You Make Extra Mortgage Principal Payments?

Should You Make Extra Mortgage Principal Payments?

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[jimhoge]

Make payments based on 15 year term. You won’t regret it. My house was paid off before I was 40. Gave me ability to buy investment property and help 3 kids with college. And retire at 58!

[GeneralMills]

7 min video and they didnt even answer the question

[dorispowers]

A no brainer, always pay more than your payment. Any extra goes to the principal. Even if you can only paid 50.00 a month extra pay it please.

[matthewdavis]

My father purchased his house back in 82 when interest rates were a little over 15%. He continued to invest in the market and his career over additional home payments. He refinanced a few times to slowly decrease the amount owed. He’s doing really well and the point is to continue making consistent habits of investing and career building. Try not to analyze numbers too much and focus on good habits and you will be very successful.

[SpicyKimchi-]

4th years on my mortgage, 45% of $376k mortgage paid. I plan on being done by another 4 years when I’m 45 yr old so I can be fully debt free and ramp up my cash flow to invest more. I still max my 401k & Roth IRA & my husband does 15% on 401k with $60k as my emergency fund earning about 4%. To me, there’s no greater peace of mind than being debt free.

[JosiahK]

The short answer is always yes, pay extra if you got it. Had a 15 year mortgage paid in 6 years, now have major cash flow to invest, especially with the market down is a great time to be investing. Everyone else worried about their mortgage when the economy goes down, here I am I can do whatever I want.

[supersportrsz]

My family made extra principal payments and now have a paid off home(paid off in a total of 9 years). Saved about $44, 000 on interest and what a stress relief to have a paid off home compared to the stress of investing. But don't get it twisted my family does invest also(Roth IRA, brokerage account and our Roth 401ks, HSA), but we started after paying off our home outside of our Roth 401ks at 15% until our home was paid off. The borrower is slave to the lender. Very true and thanks Dave Ramsey. also thanks to the Money Guy show for great videos. A lot to learn when investing and paying off our home was much more simple than figuring out index funds, mutual funds, etfs, target date funds, and individual stocks. I would say keep investing simple also with mutual and index funds for a safer route to wealth. Very scary doing this during this bear market but having our home and all debt paid off gives us the option to invest and hopefully reach retirement status sooner than expected. Keep up the great work guys.

[Melanie]

I have always paid my mortgage off as early as possible regardless of interest rate. It’s about the security of no matter if I lose my job or whatever else may occur, my family is not at risk of being homeless. For me that security is worth the lost opportunity cost.

[teragordon]

Anyone who’s not investing now is missing a tremendous opportunity

[dipaknadkarni]

I am financially secure and just entered retirement ( maybe a part time job) after retiring at nearly 30 years on active duty in the Navy as a Family Physician.
My wife died on active duty.
I bought a house that we both we could enjoy on the water.
The home is dedicated to her.
I pay an extra $2500/month towards my mortgage principle paying it off in about 15 years or less.
It is the only debt that I have and when I bought my home in 2021 at 2.5% interest rate I got lucky.
Bless all of you.

[bobbystajkowski]

We are a couple that’s in our late 30s early 40s. Paid off the house and can’t say we regret it.

[edd]

I don't see why you can't have a hybrid approach with this. Even the most aggressive market funds have around 10% of bonds that are safe with low yields. If you think about your portfolio holistically, building home equity a little bit faster while maintaining aggression with investing is a sure fireproof way to check all the boxes.

[RelearnMath]

Interesting topic, I put a “price” on peace of mind, so I’m investing until the point that my mortgage meets my investments, after that I am going to pay off my home. Best of both worlds

[cutehumor]

I got a 30 year mortgage when I was 33 years old. My 30 year mortgage will be paid off in 19 years. I paid extra. I don't want to work until my house is paid off, which would have been 63 years old. IMHO, you can't retire if you have a mortgage.

[chemquests]

There’s a liquidity risk. If you invest in something that earns equivalent to your mortgage interest, you’ll still have the liquidity if something happens when you need the money. I’d add those extra payments to this investment and payoff the mortgage with this fund is large enough.

[tonyjerry]

It doesn’t make any sense to pay down extra if inflation is higher that interest rate. The debt’s real value is going down faster that the interest you are accruing.

[jorgeluiscaballerozuniga]

For the ones financial mutants outside the US, like in Mexico with 8.5% - 12.5% interest rate, making principal payments in mortgages is a MUST

[acwells]

I've relocated several times for my job so attempting an early payoff had never been a goal for me. Now that I'm settled in a more permanent location, I'm practicing rounding up my monthly payments so there's always a little extra going toward the principal. I'll round up to the closest "quarter" so I pay xx25, xx50, xx75, or xx00 depending on the actual monthly payment amount. Ends up not feeling too taxing!

[rockystaatz]

You missed the pay extra to actually lower your payment & paying it off. Once you have it below a week of work & second week pays bills you are almost perfect for true investing and growing wealth

[jacobjohnson]

My wife and I bought our first house in October 2021 right before the interest rates shot up. So glad and thankful to have gotten 2.875% 30 year fixed. Investing all of our extra money for a great big beautiful tomorrow!