[quote=flu]I don’t get the fascination in today’s environment with the desire to pay a primary home off early, especially for someone who is young that has still a lot of earning potential and can afford to take risks and still recover.
Economic situation changes, and so does one’s strategy. Maybe decades ago when mortgage rates were at the bendover 10+% rate, there was an incentive to pay off early…But look around. Mortgage rates are 2.5% for 15 years fixed, 3.375% for 30 years on a primary. Equity in primary home is pretty dead (at least until you move out or move up)…In this current environment, why do you want your money just to still there doing nothing?
Phillip Morris pays a 3.4% dividend, AN probably has a few recommendations on dividend stocks that do over 10%, and even the sucky Intel will be paying close to 5% dividend (though, it’s still a crappy company)…And these rates won’t ever change. Someone who is well qualified and who can take advantage of this. Hell, you probably can get more than 3% by buying and selling crap on craigslist.
Paying off early is sooooo old school. Hell, I was part of that old school of thinking. Not so much anymore.[/quote]
I totally agree and that’s my thought exactly. At 3.5% or less, why would you pay it off a day early. To me, it’s all about net cash flow (income – expense). I rather have cash in the bank earning enough interests/dividend to pay for the mortgage than paying off the mortgage and not have much in the bank. You need cash to eat and you can’t eat your house. So, unless you already have plenty of cash to cover all the costs during retirement, I don’t see the need to pay off the house. I bet 10 years from now, we’ll be looking back and telling our kids how lucky we were to be able to borrow at <3-4%.
