Opinions if I should pay off my mortgage or keep money invested?

Bought my home in 03. Owe around $209K on mortgage @ 5.25% 30 yr fixed interest rate..... I have the cash right now to pay it off entirely but wondering if that is a bad idea considering the interest rate is so low and I am making more on investments right now? Opinions?

Opinions if I should pay off my mortgage or keep money invested?
Math answer is that you should not pay it off because you can make more money on your investments.





Human answer is this would reduce stress a huge amount. Your home would be safe no matter what happens to our economy. If your boss lays you off next week or your spouse gets sick or whatever, your house payment is one worry you don't have.
Reply:if inflation keeps up the value of your 209K will will be about 190K with interest (est.). So you can pay 209K today and the value of those $$ tomorrow will be about 20K less. you can take the same $$ and invest it and produce even 4% would give you a better return. the key is to have loans during inflationary times as the value of the $$ to be paid back decreases more than the interest rate. if inflation is a 4% and your interest is 5.25% you have a 1.25% real rate of interest. which is really low, no need to pay that back fast. If the other money can produce greater returns in other investments outside of realestate, use the capital to diversify your investments and let the mortgage continue, also this will help with taxes as you get your full deductions then on the interest expense, if you paid off your loan you would have to take on more debt to balance the tax payments at year end.
Reply:wow, that is an excellent query!


U did not state what the other


return is. My suggestion is to


try a 2nd option--


pay down on the mortgage this way


[and keep your other money invested]


---a; get permission from the lender


to make 2 payments a mo., on the


first and 15th.


b; along with each payment, make


a 2nd payment equaling the first payment. State on that check that


it is to go to principle only.





in under 12 yrs, your home will be


paid for in full.
Reply:If you are making more on your investments you already know the answer. You obviously were smart enough not to refinance and pull all of the equity from your home, I would pay it off when you do not expect to be making more with your liquid assets.
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Reply:If your investments are making more (or the same), I'd keep the loan in place. Your rate is low and your able to deduct the interest off your taxes as well.