Should I Pay Off My Mortgage Or Invest? [Answered]

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As you continue through your financial journey, you may be wondering if you should pay off your mortgage or invest. Depending on what stage of life you are in, you may be leaning one way or the other.

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Understanding Your Mortgage

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How To Understand Investments

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Extra Money Towards Mortgage Scenario

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Invest The Extra Instead Scenario

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Apples To Apples

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So Should You Pay Off Your Mortgage Or Invest?

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Should I Pay Off My Mortgage Or Invest? [Answered]

As you continue through your financial journey, you may be wondering if you should pay off your mortgage or invest. Depending on what stage of life you are in, you may be leaning one way or the other.

Understanding Your Mortgage

Before we make a decision, let’s take a deeper look into what we are paying for with a mortgage. A look at our interest rate, monthly payment, and the amount of time we are paying for a loan will determine how much we actually pay.

How To Understand Investments

First and foremost, not all investments are the same. For this example, let’s assume we decide to invest in an S&P Index Fund (great choice!).

Investment = $955 a month, for 30 years at 8% interest

Monthly Investment = $955 = $11,460 a year Total Investment After 30 Years = $1,402,083.65

Extra Money Towards Mortgage Scenario

Mortgage = $200,000 at 4% for 15 year

Invest The Extra Instead Scenario

Apples To Apples

So Should You Pay Off Your Mortgage Or Invest?

The clear answer is to invest first. By delaying your retirement and focusing on your mortgage, you are giving up way more than you are gaining.

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