Comments on: Pay Off Mortgage Sooner, Invest, Or Save? The Math Analysis

By: Craig Ford

Craig Ford — Fri, 23 Dec 2011 20:15:45 +0000

Jennifer,
I can see how that would make a difference. When you sell the house you’ll have the same value of equity because your loan repayment amount will not fluctuate.

By: Jennifer S.

Jennifer S. — Tue, 20 Dec 2011 19:00:42 +0000

Thanks for this article Craig! I’ve been asking myself these same questions and have been looking for the answers. I do fee like paying off the house first would be the best decision for me. However, does this still work out the same if you were to sell your house before the mortgage is paid in full? That’s where I keep stumbling. And I assume it would make a difference in this economy if your house isn’t worth what it was when you bought it. Thanks again for your helpful article!

By: Craig

Craig — Wed, 26 Oct 2011 19:58:01 +0000

Alvin,
Sorry I misunderstood. I’m assuming you’re completely debt free other than the home, right? In that case either choice would be good (invest or pay off mortgage). You may feel better about paying off the mortgage because it is a more sure return. That’s find. I wouldn’t pull money out o the market to pay off the house.
This is not professional, legal, or accounting advice. Simply my thoughts on what I would do.

By: Alvin

Alvin — Wed, 26 Oct 2011 06:13:51 +0000

Hi First thank you for your help David and Craig.
Craig,
my 457k retirement account is not matched from employer, so you mean I should pay extra on my mortgage first. right?
By the way, I lose a lot of money from 457k within this couple years.

By: Craig

Craig — Tue, 25 Oct 2011 19:53:35 +0000

Alvin & David,
I would not “take out all your money from all account” if you are referring to retirement funds as you will (in most cases) pay taxes and fees to do so. Furthermore, I prefer diversification so I’d try and do a little of both.

By: David

David — Tue, 25 Oct 2011 12:38:02 +0000

@ Alvin, Paying off your home is saving for retirement because when you retire your mortgage will be zero dollars every year, take out all your money from all accounts to pay off your home first.

By: Craig

Craig — Mon, 24 Oct 2011 20:21:44 +0000

Alvin,
The premise is that you should be sure that your saving an appropriate amount for retirement while paying off your house. If you have an opportunity for a match I would be sure that I was investing there first, but it is a very personal decision.

By: Alvin

Alvin — Sat, 22 Oct 2011 19:40:20 +0000

Hi Craig,
I do have a question:
“Are you already saving 15% for retirement? If not, pay minimum house payments and invest into your retirement account.”
In my case, I have my State Gov. retirement (Calpers). beside that, I have a 457k account ( but not match). Do you think if it is still a good idea to max out my 457k account first; then put extra money to my house mortgage?
Thank you for your help

By: Craig

Craig — Fri, 12 Aug 2011 21:59:01 +0000

Rick,
Sorry you didn’t find the article very helpful. Hopefully you can discover the answers you were looking for.

By: Rick Flerry

Rick Flerry — Wed, 10 Aug 2011 00:14:46 +0000

Overall a pretty poor analysis, Craig. You didn’t even factor in the interest saved by paying off early. In other words, you got all dressed up for dinner and didn’t bother to put in your dentures.