Paying off a mortgage
Hi. My husband and I always argue about if we should pay off our mortgage. We have a very low interest rate(~2.5). He thinks we should keep our money invested earning over 10% and I think we should pay off the 250,000 we owe on the house. We’re 59 and 60 years and he is a couple of years away from retirement. I’m retired. What other factors should be in the mix to make this decision. We also have second vacation home with the same situation. Thanks for your input.
Terry Says
DO NOT pay off that precious low-rate mortgage!
For many years, I advised paying off a mortgage before retirement. But this mortgage is a gift at this low rate.
However, don’t count on earning 10% on a stock portfolio in coming years! We’ve had some incredible gains that are not likely to contine.
The perfect compromise to set your mind at ease, is to sell one-third of that stock portfolio and put it in CDs or T-bills, earning 3.5%. Then you’ll know that you have money to pay that mortgage and other expenses if the stock market takes a downturn!
