Paying off a mortgage early is not always a great idea, especially for those who have low interest on their loan. Read this article to know why.
Is It A Bad Or Good Idea?
SOURCE– It’s usual for people to sign a 30-year mortgage and spend three decades of their lives paying off their homes. But, you may pay off your mortgage early to save money on interest, especially when you have extra money to pay. Do you know not all cases are the same?
Those people who have a low interest on their mortgage loan should stick to their regular payment schedule rather than try to get ahead of it. For example, you signed your mortgage in 2021 and the rates were super affordable just only 3% on your 30-year mortgage. Then, you have extra money to pay off your mortgage early, it is not a great idea because when trying to pay off your mortgage early you may lose out on 4% interest in a risk-free savings account just to save 3% interest on your loan.
When deciding to pay off a mortgage early, you should consider the interest rate on your loan. If your loan has low interest, it’s a good idea to stick to your regular payment schedule, even though you have extra money to pay early.