Pay off mortgage or make monthly payments and invest the rest?

You are overthinking it.

Why do you need money, now or in the future? Why does anyone need money?

The biggest bill in most households that aren't cooking meth is mortgage/rent payment.

I guarantee you if 99.9% of people lost their job today, their biggest concern is losing their home/living situation......NOT oh no, now I can't invest as much for that day that I hope I'm alive 30 years from now.

I'd argue you are under thinking it.

I'm not sure if my point is clearly coming across since you aren't directly addressing what I wrote, but I have both more freedom today and will have more later by not paying down my mortgage, even at a relatively high rate.
 
As normal you are generalizing. Nobody you are speaking of had 3% fixed 30 year mortgages. Nobody you are speaking of had the liquidity to pay off their house in cash.

Many people had this happen because they bought the variable rate mortgage sales pitch hook line and sinker without understanding how money works.
You know my friends better than I do apparently.

The comment definitely shows you are quit detached from the realities of what many folks went through, you read ARM mortgages are to blame and assume everyone who lost a job or was cut way back automatically also had an ARM. Those that already had their houses paid off were in a much better position to not lose it. That only takes freshman economics to understand.

The same dynamics occurred during Covid when many folks lost their jobs for a year and lived off Covid checks and hand outs. We watched a number of friends just not be able to keep up with their mortgage and they lost the house. But you want to say they just don’t understand money? Every one of them wished their house was already paid off.

We refinanced a house at 3% thanks to Covid, but we’ll pay it off way early.
 
I haven’t read the entirety of this thread. I’m too stuck on how many morons on here can’t understand paying twice a month versus ever two weeks. This isn’t any Canada vs USA difference or 4.2 weeks in a month or any other stupid unrelated nonsense.

Level set: there are 12 months in a week. There are 52 weeks in a year.

If you pay half your mortgage twice a month that is 24 half payments, the same as 12 full payments.

If you pay half your mortgage ever 2 weeks that results in 26 half payments, the same as 23 full payments.

So long as your mortgage holder allows and will set it up, making an extra full payment towards principal will go a long way towards shortening your repayment period and total interest paid.

Paying twice a month has an almost zero impact your repayment period and interest paid. All you are doing is saving the interest of a few days and only the principal amount of your half payments. It’s virtually pointless.




There rest of y’all can argue about rates and payoff, but the financial, and really just basic math/logic illiteracy never ceases to amaze me.
 
I haven’t read the entirety of this thread. I’m too stuck on how many morons on here can’t understand paying twice a month versus ever two weeks. This isn’t any Canada vs USA difference or 4.2 weeks in a month or any other stupid unrelated nonsense.

Level set: there are 12 months in a week. There are 52 weeks in a year.

If you pay half your mortgage twice a month that is 24 half payments, the same as 12 full payments.

If you pay half your mortgage ever 2 weeks that results in 26 half payments, the same as 23 full payments.

So long as your mortgage holder allows and will set it up, making an extra full payment towards principal will go a long way towards shortening your repayment period and total interest paid.

Paying twice a month has an almost zero impact your repayment period and interest paid. All you are doing is saving the interest of a few days and only the principal amount of your half payments. It’s virtually pointless.




There rest of y’all can argue about rates and payoff, but the financial, and really just basic math/logic illiteracy never ceases to amaze me.

I was dumb and dropped matrix theory once and barely passed it the second time…how is 26 half payments the same as 23 full payments? ;)
 
Just curious… so you’d rather own a $500k home with no mortgage than a $500k home with a $250k mortgage at a low rate and $500k in liquid investments?


To start off, I’d never buy a half million dollar home. Anybody that goes in my neck of the woods is an idiot. Second, while money is great, learning to prioritize things helps me realize that owning my home is leverage against sickness, lay offs, etc….

Everyone reading this will face struggles in life that are more important then their portfolio. Get cancer and don’t work for a year while taking treatments and you’ll find you worry about your family’s needs more than their market shares

Im doing fine on “liquid investments”. It’s time to own my home. For my family. Lord willing it’ll happen to. YMMV. But, that’s where I’m at.
 
You know my friends better than I do apparently.

The comment definitely shows you are quit detached from the realities of what many folks went through, you read ARM mortgages are to blame and assume everyone who lost a job or was cut way back automatically also had an ARM. Those that already had their houses paid off were in a much better position to not lose it. That only takes freshman economics to understand.

The same dynamics occurred during Covid when many folks lost their jobs for a year and lived off Covid checks and hand outs. We watched a number of friends just not be able to keep up with their mortgage and they lost the house. But you want to say they just don’t understand money? Every one of them wished their house was already paid off.

We refinanced a house at 3% thanks to Covid, but we’ll pay it off way early.
Anyone that did what has been suggested wouldn’t be worried about making a house payment if they lost their job.

If I could make double payments on my house but instead took that extra money and put it in a HYSA, every month I would be saving a months payment.

Let’s say one does that for five years. You would have five years worth of payments saved plus whatever you gained in interest. If I have five years of payments saved, the last worry I have is making a payment if I lost my job.

If your friends are doing that but their number one concern is making a house payment when they lost their job, your friends are lying about what they are doing.
 
Lots of interesting info and I haven’t read it all so maybe this was answered; I have a low interest rate but also don’t think I’ll be living in my current house when I retire. Would a potential move prior to retirement effect someone’s thoughts on paying extra principal vs putting that extra into retirement accounts?
 
Anyone that did what has been suggested wouldn’t be worried about making a house payment if they lost their job.

If I could make double payments on my house but instead took that extra money and put it in a HYSA, every month I would be saving a months payment.

Let’s say one does that for five years. You would have five years worth of payments saved plus whatever you gained in interest. If I have five years of payments saved, the last worry I have is making a payment if I lost my job.

If your friends are doing that but their number one concern is making a house payment when they lost their job, your friends are lying about what they are doing.
For someone who doesn’t care what I say, you sure have a lot to say about it. lol

You do you however it makes you feel good.
 
Lots of interesting info and I haven’t read it all so maybe this was answered; I have a low interest rate but also don’t think I’ll be living in my current house when I retire. Would a potential move prior to retirement effect someone’s thoughts on paying extra principal vs putting that extra into retirement accounts?
I’ve moved away from every house I’ve ever bought. It doesn’t change my calculus unless I only plan to live in it for a very short (less than a year) period of time. Buy it, fix it up a bit, move away and rent it. Let others pay your mortgage for you. Build equity in principal pay down and appreciation. Especially if it’s a low interest rate.

Save the money and “invest” in a house at the next place you move.

Now know renting can be a tad stressful. But it’s lucrative if done right. Also know on a new loan you’ll have the old loan held against you. Normally credited for 80% of rental contract value of the old home. So it will likely impact your debt-income ratio for purchasing/lending power.
 
For someone who doesn’t care what I say, you sure have a lot to say about it. lol

You do you however it makes you feel good.
I said I don’t value your opinion not that I don’t care what you say.

There are a lot of people that I don’t value their opinion but if they were telling people that 2+2=5 and I still going to make sure that people know they are wrong.
 
Lots of interesting info and I haven’t read it all so maybe this was answered; I have a low interest rate but also don’t think I’ll be living in my current house when I retire. Would a potential move prior to retirement effect someone’s thoughts on paying extra principal vs putting that extra into retirement accounts?
Would depend on how long you plan to live there. Making more payments on a house for short term makes far less sense than long term. The amount saved in interest short term is far less than long term.
 
I haven’t read the entirety of this thread. I’m too stuck on how many morons on here can’t understand paying twice a month versus ever two weeks. This isn’t any Canada vs USA difference or 4.2 weeks in a month or any other stupid unrelated nonsense.

Level set: there are 12 months in a week. There are 52 weeks in a year.

If you pay half your mortgage twice a month that is 24 half payments, the same as 12 full payments.

If you pay half your mortgage ever 2 weeks that results in 26 half payments, the same as 23 full payments.

So long as your mortgage holder allows and will set it up, making an extra full payment towards principal will go a long way towards shortening your repayment period and total interest paid.

Paying twice a month has an almost zero impact your repayment period and interest paid. All you are doing is saving the interest of a few days and only the principal amount of your half payments. It’s virtually pointless.




There rest of y’all can argue about rates and payoff, but the financial, and really just basic math/logic illiteracy never ceases to amaze me.

I was dumb and dropped matrix theory once and barely passed it the second time…how is 26 half payments the same as 23 full payments? ;)

Clearly you missed the part where there are 12 months in a week! (Just poking fun as I know the intent)


I’d definitely be putting money into secure investments at a higher % return if this was me. Liquid assets if stuff went south would provide me the same mental security as a paid off mortgage.
 
You are not going to convince those guys that need that peace of mind in the back of their head. It's priceless to them.
Makes 0 sense to me, but different strokes, different folks. I'd much rather owe $$ on my house at a sub 2.5% and be making over 4% on my investments with 0 risk. Knowing that i can pay my house off whenever I want to, is what makes me happy. Making money with my money, risk free.
That’s how I’m rolling. Although my mortgage rate is 3.45, I’m still making money on Tbills and notes that pay a higher rate. Not to mention, the interest expense on the mortgage is still tax deductible.
 
I said I don’t value your opinion not that I don’t care what you say.

There are a lot of people that I don’t value their opinion but if they were telling people that 2+2=5 and I still going to make sure that people know they are wrong.
You believe whatever math you want, but for a lot of people apparently with less income than you have saving an entire house payment every month isn’t an option. You talk about your way as the only way that actually makes sense, just goes to show there’s big holes in what you’re saying. It shows how detached many people are from the realities of big downturns and layoffs, let alone medical issues and other things that disrupt people’s lives in big ways.
 
You believe whatever math you want, but for a lot of people apparently with less income than you have saving an entire house payment every month isn’t an option. You talk about your way as the only way that actually makes sense, just goes to show there’s big holes in what you’re saying. It shows how detached many people are from the realities of big downturns and layoffs, let alone medical issues and other things that disrupt people’s lives in big ways.
See that’s the beauty of it all, math is math. It either works or it doesn’t. One can choose to not believe it but it doesn’t make them right.

I never said I could make double payments. That was used as a hypothetical. Doesn’t change anything if it’s double payments or an extra 50 bucks a month.

Trust me, I have seen enough lives turned upside down in far worse ways than someone losing a job. I am not detached from reality. I am well aware of how fast life can turn into a shit sandwich without the bread.
 
I have a 3.7% rate on the house. I was working to pay it off but a couple years ago I realized that putting the extra money in a 5% savings account was way smarter. Investing that money might work out even better but I don’t want to go all in on that until I have a really nice safety net built up.
 
I haven’t read the entirety of this thread. I’m too stuck on how many morons on here can’t understand paying twice a month versus ever two weeks. This isn’t any Canada vs USA difference or 4.2 weeks in a month or any other stupid unrelated nonsense.

Level set: there are 12 months in a week. There are 52 weeks in a year.

If you pay half your mortgage twice a month that is 24 half payments, the same as 12 full payments.

If you pay half your mortgage ever 2 weeks that results in 26 half payments, the same as 23 full payments.

So long as your mortgage holder allows and will set it up, making an extra full payment towards principal will go a long way towards shortening your repayment period and total interest paid.

Paying twice a month has an almost zero impact your repayment period and interest paid. All you are doing is saving the interest of a few days and only the principal amount of your half payments. It’s virtually pointless.




There rest of y’all can argue about rates and payoff, but the financial, and really just basic math/logic illiteracy never ceases to amaze me.
Perhaps I missed the part where 24 half payments equals 23 full payments. Did you mean 13 payments?
 
I didn't want to waste so much money so I built my house slowly over 5 years.
I ain't the smartest cookie in the drawer but I know I didn't want to borrow money and have a 20/30 year note. I figured out how to use a mortgage calculator and them numbers it spit out hurt haha


All my buddys were having houses built about the same time i was building ours and after hearing what their monthly payments are makes me sick. I was pinching penny's and was able to finish ours for substantially less per square foot.


I'm surprised more people don't take it slow and save money.
 
I just looked at my mortgage statement.
Its 2.25%, my P&I is $650/ mo, [Escrow is $480 - nonfactor because Id have to budget for that anyway]

I can easily double my interest rate with the P&I payment by investing it.
 
Are we really debating whether having:

Super runny liquid cash money sitting in a high yield savings account - earning interest at a higher rate than a mortgage’s interest.

Or

Concrete incredibly difficult to unlock illiquid equity in a house that’s financed at below high yield savings account rates



Is a better idea for anyone, regardless of financial or social situation?


Up really is down.
 
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