Why You Should Stop Paying Down Your Mortgage 

I paid off my home and regretted it. You can’t spend the equity in your home unless you sell it. However, I now have a $1M line of credit on said paid off house. Using it currently to buy a lake lot and build a lakefront property to sell. Target sale price will yield $300k-$400k of profit. Will take 6 months. My interest payments over that period will be approx $20k. That’s a heck of an ROI!

To each his own… I would rather have a paid off mortgage. And as fast as possible.

An advice from someone you had the option to pay off his mortgage but decided to invest in the stock market. I would have rather done both than put all the extra money into the stock market. My stock portforlio is down 50%. I could have been mortgage free by now if I had paid off my house and then now concentrate on investing.

The people that comment disagreeing and saying it’s better to pay off their mortgage are making decisions based on “fear or feelings” instead of logic…can’t rationalize with people who are not logical

Home price appreciation was ignored over 10 years! The million $ home would be worth 1.5M$ in 10 years. Inverts the result.

Point well made, however, the value of a 1 mil dollar home after 10 yrs would be a lot higher than that especially in NY or CA. Am I wrong? And you can always borrow against it particularity if interest rates are low.

Good info, thanks for sharing!

Thank you for this Sharon! Great video!

Thank you for your video. Using money from the value of your personal residence with a mortgage it’s extremely expensive. On a 4% interest mortgage, the home owner should calculate it differently than the Bank. 1) Calculate the mortgage payment for the current month, then identify how much was the principal and Interest. Then divide the principal by the interest for that one month. The result it’s the actual interest percentage for every dollar the home owner paid to the Bank that month.

Great gouge. Thanks.

Great content!

Omg. Thank you so much for this video. You convinced me to stop paying extra!

Quick summ: a reliable investment with a yield % > mortgage interest % -> more profit long run. Good advice, and thank you for creating this for us!

Having a paid off mortgage is better than investing. The stock market is always reacting to Banks closing, Federal Reserve announcements or corporation cutting back. Now with inflation its not smart to have a mortgage.

Thank you for your knowledge and explanation. I have been considering this and you’ve helped me to come to a decision about investing 💰

I’m following your example but it doesn’t illustrate the amortization of a mortgage where you really are paying far more interest than principal at first and this number changes over time. Your examples show fixed interest and principal over time.

Is it better to gift a free & clear house OR a mortgaged to the hilt house? Just discovered your channel! Super content & delivery

i caught your vid just in time i,m now paying off my HELOC. not my motgage. It is in a " payoff situation and the rate is getting higher , My mortgage is low , and i can carry it easily. But i have often thought about investing , but never sure if this is PROFITABLE or just treading water??.

Hi. Great video. So our mortgage is 2.25% and we’ve been using this strategy for a bit now. We decided on a 15 year over a 30 year when we did a refi a few years ago. Mortgage around $425k. Do you think it makes much of a difference with choosing the 15 year versus the 30? My guess is you’ll say that we could have lowered the payment more and also invested that. But curious your thoughts. Thanks!

Can you do one for us poorer folk? What if we only have an extra 2k per year?

I personnally know some baby boomers that paid their mortgages early on expensive houses after a couple of relocations in their lives and never invested any of the money and are now struggling to keep up with Homeowners insurance and property taxes. They say they can't take out a equity loan due to high rates and being in debt again. I'm just shaking my head.

On my new mortgage every dollar paid to principal pay down was matched the interest saved.

Home is the new savings account with a great return (depending on when and where u bought) pay down the Mtg and save the unnecessary intrest paid to the bank. A "penny saved is a penny earned" Instead get Personal Lines of credit which charge simple intrest and invest that instead?

You have to pay taxes on the investment gains though while paying off mortgage in not taxed. This should probably go into the spreadsheet. Furthermore, this extra income will be taxed at one’s highest bracket.

Hi Sharon, thanks for the video and sharing your perspective. Constructively speaking, you begin the video by giving such a huge disclaimer about who your strategy is NOT for but then proceed to reference/criticize Dave Ramsay’s principles as outdated when his target audience are the exact people you have cautioned to avoid your strategy, which is likely +90% of working adults. With over 50% of people making over $100K a year living paycheck to paycheck, it sounds like your target audience is a very slim percentage of high income earners possibly making way over $100K a year and who have $50K of excess annual take-home pay as shown in your example (or who can even afford to comfortably buy a $1million house). Dave Ramsey’s principles are not about maximizing wealth; it’s about creating a foundation for living and retiring with dignity. The principles help people develop the discipline to get out if debt and create enough margin to actually invest a good percentage of their income without playing arbitrage on a primary residence as your strategy suggests. Very few people possess the discipline and circumstances to do what you’re suggesting. Truthfully, it doesn’t take much effort for someone to become a net worth millionaire in their lifetime and yet the majority of people fail to do so. This is because it is more of a human behavior problem than a math problem. If a 30 year old person making $90K a year invests 15% of their gross income at a 8% rate of return for 35 years until the age of 65, that works out to be roughly $2.58million and $206K of prospective annual returns at 8% which is way more than the initial $90K income assumption postulated as the input in my calculation. When you consider that the median/middle net worth of people ages 65-74 is only $266K, having $2.58million and a fully paid of house is tremendously more dignifying than the life that the majority of Americans are living.

You are right. Dave thinking on paying off 3% mortgage debt when bank is giving 5% on savings is outdated

Would rather pay off mortgage. Zero risk and peace of mind.