Should I pay off the house under these circumstances?

[Anonymous]

HHI changed recently, down to $250/yr. Mortgage is $6k/mo, 2.5% fixed. Payoff amount is around $900k

Have investments of around $5m. Does it make sense to pay it off and not worry about monthly mortgage, or leave it alone since the interest rate is low? Spouse and I have different opinions, but both could be persuaded.

One kid in college, paying $35k all in. No other large expenses.

[Anonymous]

I’m sure there’s a calculator you can use for this but at 2.5% the answer seems likely to be no.

[Anonymous]

Can you swing it at $6k a month? I couldn't.

[Anonymous]

What kind of investments? Will you pay taxes if you use them?

[Anonymous]

Muni Bonds have sold off and you can get good ones for 4-5 percent. But the munis, get tax free income and use to pay off mortgage

[Anonymous]

You should pay off all of your debts and enjoy a debt free life.

[Anonymous]

or you can buy a rental home and diversify your portfolio.

[Anonymous]

If you lose your job and the market tanks by 50% with this Trump economy you’ll probably be wishing you cashed out to pay it off.

Will this happen? I have no idea, probably not. But it’s possible.

[Anonymous]

I would leave your mortgage and only sell what you need to cover the shortfall each year.

[Anonymous]

Anonymous wrote:I would leave your mortgage and only sell what you need to cover the shortfall each year.

I agree.

[Anonymous]

No

[Anonymous]

Anonymous wrote:Can you swing it at $6k a month? I couldn't.

You can't pay that? What are you doing with the rest? It seems a bit tight but doable.

[Anonymous]

Anonymous wrote:No

Why not?

[Anonymous]

Anonymous wrote:What kind of investments? Will you pay taxes if you use them?

OP here. Yes, they're taxed. Probably sell some stocks.

[Anonymous]

Anonymous wrote:I would leave your mortgage and only sell what you need to cover the shortfall each year.

This is what we are doing. DH was laid off at 60. Our HHI is now $175K, and our mortgage is $155K at 2.75% 15 yr fixed. The mortgage payment is about $1400 per month. Our mortgage interest last year was $4559.

If we have a large medical expense (which we have had in the past, and given our older ages, we may again), we will need the cash. Plus, I am not 100% sure about what will happen with my job now. So, we need the cash to live off of. The interest payment is tiny and doesn't really make much of a difference in our annual expenses.