Should I Pay Off My Mortgage?

[CestMoi]

Hi All,

I'm 49, currently living with my BF in a reasonably-priced condo in an expensive area (will retire much cheaper), and trying to retire with over a 1M net worth in my early 50s. I earn $76,000/year; my net worth is currently 720k (not counting the worth of my condo); and I invest 65% of my income yearly overall.

My only remaining debt is an $8,600 mortgage at 6% interest that I've been making extra payments on every month (around $630 total). Lately I've been thinking about paying it off in one fell swoop and investing the same amount every month instead. I have sufficient cash available in one of my accounts to pay off the debt, still leaving more than 6 months expenses for an emergency fund.

I want to invest, save, and grow as much as possible these last few working years. Good idea to pay off the mortgage? Where to put the monthly money if I do pay it off? Comments or advice?

[CarDude]

I'd pay it off. I sleep well without debt.

[JoyBlogette]

Find out what the penalty is for paying it off early, that should help you make your decision.  6% interest is pretty high though so I'd say paying it off would be a solid guaranteed return on investment.

[Prairie Stash]

Pay it! The happy feeling will be worth every penny, plus 6% is high.  You can also decrease the EF, since you'll be mortgage free.

[forward]

As long as there is no penalty, and there shouldn't be, I'd pay it.  Check with your bank, the payoff amount may even be a little less that you think.

720 at 49, way to go!  You are getting close!

[BFGirl]

Pay it off!!  You are very close, no sense in continuing to pay interest on it.  Congratulations on your success so far!

[caseyzee]

I don't think it matters a whole lot.  If you are down to just $8600, in a high COL area, you've probably already paid most of your interest.  So, I would guess you won't save a lot, but could give you peace of mind, and free up cash for other investments.

[Catbert]

With such a small balance just pay it off.  It's roughly the equivalent of getting a 6% CD/bond for whatever the time you would otherwise being paying on the mortgage.   I recently paid off my 4.75% 50K mortgage with the same logic.

[CestMoi]

I just sent a wire transfer to pay off the mortgage.

Bye mortgage!

Thanks for all the comments and advice. They gave me the necessary push.

[maki]

hard to say without knowing your entire situation, but i would also veer toward the "pay it off" end of the spectrum.

have you also thought about renting instead of owning? by this, i mean is it possible/feasible for you to rent out the apartment you own for more than you would pay in rent at another place in the same area. for example, if you could rent a condo down the road for $1,000/mo, and rent out your apartment for $1,500/mo, that's an extra $500/mo you could cash flow just by moving your place of residence.

[CestMoi]

makistar, good suggestion. I'll keep that in mind.

I'm open to any and all ideas on how to aggressively save/invest leading up to my retirement. No suggestion too stringent.

[nereo]

I just sent a wire transfer to pay off the mortgage.

Bye mortgage!

Just had to say CONGRATS!  I'm still 13 years from that beautiful day (and with a 3.04% rate I won't pay it off any faster). 

[CestMoi]

RE: Just had to say CONGRATS!

--Thank you! It felt good.