Should I Pay My Mortgage Early?

Whether you should pay your mortgage early will depend on your financial status and your capacity to meet your other obligations.

If you have abundant savings and your salary permits you to afford your monthly expenses, you should consider using your leftover money to pay off your mortgage as soon as possible. Paying off your mortgage early will help you to reduce overall interest payments and will build equity in your home.

On the other hand, if your savings are stretched and you are having trouble meeting normal monthly living expenses, paying off a mortgage early will eat into your savings. It may deplete the money needed for emergencies and could otherwise limit your ability to meet other obligations and financial needs.

It's important to balance your available funds with your mortgage repayment schedule. Pay careful attention to the risk of using savings to pay off your mortgage; make sure you can cover your household costs and maintain a fund for unexpected emergencies and other problems.

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When you are thinking about using extra money to pay off your mortgage early, you should still retain emergency funds, plan for retirement, and continue to work toward financial independence. Consider working with a financial and legal advisor to develop your payment plan.