Mortgage free within the beltway?

[Anonymous]

Has anyone done this? DH and I live inside the beltway. We're middle class, but bought at a good time and could pay off our mortgage in full. I know it's not the best financial decision, but anyone have views on the psychological effects?

[Anonymous]

Assuming you have a good rate (and if not then refinance) I can’t think of any good argument to do this. We have $2M in our taxable accounts (not counting retirement and college funds) and an outstanding mortgage of about $500k at 2.%. We could easily pay this off but why in the world would we?

[Anonymous]

2.5% that should say

[Anonymous]

Plenty of people do this. There's something to be said for the peace of mind of not having a mortgage payment.

[Anonymous]

That depends on you. It’s definitely not the best use of your money, but it’s better than keeping it in a checking account or under your mattress.

[Anonymous]

As inflation continues and money loses value, you might be psychologically impacted by knowing you shifted a disproportionate chunk of your net worth that could be growing into paying off a fixed bill that gets cheaper every month.

[Anonymous]

Anonymous wrote:Has anyone done this? DH and I live inside the beltway. We're middle class, but bought at a good time and could pay off our mortgage in full. I know it's not the best financial decision, but anyone have views on the psychological effects?

If I could, I would pay it off. Keeping in mind that you will need to pay your property taxes directly instead of escrowing them.

[Anonymous]

Assuming you have a 30 year loan, many years left on the mortgage?

[Anonymous]

It depends on a few factors. I was surprised that most traders on Wall Street pay cash homes.

They usually lose job in a big market crash so risky a big mortgage and all on stocks.

But a govt worker is different

[Anonymous]

Terrible idea, assuming your interest rate is lower than the stock market is appreviating. You are borrowing $300k at 2.5% but making 5% in the market for example.

[Anonymous]

I’ll do it when I retire. It’s a bad financial call, but as long as my mortgage rate is similar to safe bond returns, I’ll pay it off. At that point with a paid off house and halved property taxes, I should be pretty set in terms of volatility.

Until then? I’ll let me money ride in the market.

[Anonymous]

It's probably a poor financial decision but plenty of people make quantitatively bad decisions for qualitatively valid reasons. Maybe it allows them to better manage cash flow and have one parent stay home. Maybe they just sleep better at night.

[Anonymous]

Anonymous wrote:I’ll do it when I retire. It’s a bad financial call, but as long as my mortgage rate is similar to safe bond returns, I’ll pay it off. At that point with a paid off house and halved property taxes, I should be pretty set in terms of volatility.

Until then? I’ll let me money ride in the market.

Same.

[Anonymous]

Might not be a bad idea now as the markets are starting to enter a very rocky phase. You pay it off now, save the interest, and buy back into the market.

[Anonymous]

All these people saying it's a bad idea don't have a clue how interest works.

Do you have any idea how much interest you pay on a 500k note? Accelerating that pay off saves tons and tons of money.