June 28, 2020

The pros and cons of prepaying your mortgage

You don't have to wait out the remaining term of your mortgage to pay it off. Instead, you can make accelerated payments on an occasional or regular basis, which could save you big money otherwise spent on interest and pay off the mortgage early. This may be a good strategy if you have a higher interest rate and extra money in the bank. It can also be a smart tactic if you want to worry less about debt.

But your mileage may vary. Prepaying your mortgage may not be your best option. You might earn a higher rate of return investing that extra cash. It could be wiser to simply refinance if rates drop. And you may regret prepaying if you need more money later for an emergency.

Read my newest article for Money-Rates.com and decide for yourself if making accelerated mortgage payments is worth it or if you're better off saving or investing that money.