The Benefits of Having a Mortgage

Paying off the mortgage is the American Dream and the first step toward retirement; it’s harder to retire with a mortgage payment blowing a hole through a fixed budget. Owning your home is the foundation of any vibrant financial plan. Until your home is unencumbered (without a mortgage) the bank still owns it in a manner of speaking (and they’ll remind you of it if you miss a payment).

Still, a home mortgage has its benefits. The traditional reasons to carry mortgage debt are bad reasons to carry the liability, but there are still a few good reasons.

We will review the traditional reasons for borrowing against your home and why the benefit is perceived rather than real. We will finish with the three reasons a mortgage can help you build wealth.




Revolving Mortgage

The debate is legend: should I pay off the mortgage faster or invest the extra instead? I recently finished that personal debate permanently.

In Accounting 101 they teach students how leverage (borrowed money) spikes investment returns. It all makes sense.  If I pay cash for a $100,000 home and it increases in price by $3,000 the first year I managed a meager 3% return on my investment (assuming you feel your primary residence is an investment). If instead you borrowed $90,000 and only invested $10,000 of your own money, the gain jumps to 30% ($3,000 increase in value divided by the investment of $10,000).

A mortgage is a powerful financial tool to build wealth. It also carries risks that can harm. Learn how to use a mortgage to build wealth.

A mortgage is a powerful financial tool to build wealth. It also carries risks that can harm.

They also teach of the risks of leverage in the classroom, but it doesn’t feel as real as the real world will make it. Leverage is wonderful animal when your assets are increasing in value. When the inevitable decline happens real pain begins.

In our above example the 30% gain is an illusion. If you have a mortgage against your home you will pay interest and that reduces the actual gain. Let’s assume a 5% interest rate on your mortgage. This equals $4,500 in interest the first year without consideration for the principle payments on each monthly payment. Your 30% gain went south darn fast, taking a $3,000 gain and turning it negative!

But if I invested the $90,000 (assuming I didn’t need a mortgage) and earned a return there I once again should be popping some mouth-watering returns. Maybe.

We’ll return to this in a moment.

Understanding how leverage can spike investment returns, I always subscribed to holding a mortgage. I bought my first home in 1986 and had a loan against it. It was paid off when the home was sold. (I’m embarrassed to say it was a mobile home, but in my defense I was single and enjoying life to the max. I was retired at the time (turned out to be gap years only) and immersing myself in an endless supply of books.)

From the mobile home I moved into a three bedroom ranch in town (1989); full mortgage in place. Opting to invest every dollar I had, the mortgage was never paid a penny sooner. Then I bought the farm (sounds morbid, doesn’t it?).

The farm is my final resting place and — embarrassed as I am to say it — was used as an ATM since 1995 when I took ownership. The farmhouse was unlivable, but I wanted a traditional barn and the 10 acres also appealed to me. I coughed up a $120,000 hairball with a $100,000 mortgage. I handled some remodeling on my own to make the farmhouse livable until I was ready to seriously remodel with an addition.

A few years later (somewhere around the year 2000) the mortgage was down to $40,000. It was time for a serious upgrade.

My 900 square foot farmhouse swelled to 3,000 square feet and cost close to $200,000 to remodel and expand. (I still swallow hard when I think of that. Not to be outdone, the bank (Farm Credit; they have awesome terms and interest rates for farmers) allowed me to borrow 80% of the value of the finished home; $400,000. That means I was able to grab another 80 grand and drop it into the market.

By 2008 the farm mortgage was under $100,000 again as I paid extra in spurts. The market tanked and good credit came to the rescue; I was able to take another quarter million. Into the market it went.

Of course I look like a hero because the timing of my remortgages coincided with market declines. This wasn’t an accident. When the market died I wanted to add to the account and the ATM was cheap money. (You can read the prior article linked above for more. The ends do NOT justify the means so the increase in investment value is a poor reason to toot my horn.)

I tell you this story for a reason. I struggled with paying off the mortgage for decades as many readers also do. I had the funds to retire the debt a long time ago, but chose to keep the mortgage anyway. Until last month.

At the beginning of this year I had whittled down the mortgage to ~$100,000. I didn’t want to sell assets/investments to pay the mortgage, causing a taxable event. Hyper-frugality set in. By June the mortgage was down to $57,000 and the sickness set in. It was time to kill the mortgage forever!

And I did it! On October 5th I made a special trip to the bank to put the final nail in the mortgage. (Mrs. Accountant came with to experience the magical moment. Either that or she didn’t trust me and was worried I might chicken out and drop it all in an index fund.)




Traditional Benefits of a Mortgage

Mortgages have been touted for a variety of reasons with promises of helping the economy, providing liquidity to the housing market and offering tax advantages to some. We’ll now run down many of the most popular traditional mortgage advantages and why it’s best to avoid the boondoggle.

 

Real estate is a known way to create and build wealth. Turn your property into a cash cow using the right financial tools.

Real estate is a known way to create and build wealth. Turn your property into a cash cow using the right financial tools.

1.) Tax Advantages. This is the most popular reason given for having a larger mortgage. Banks and other financial institutions have a vested interest (pun intended) to get you to borrow more. You know the advertisements: Mortgage interest may be tax deductible. Consult your tax professional. Rarely do people consult with their tax professional and the bank is counting on it. All people hear is mortgage interest is tax deductible.

Why this is bad advice. 

Every lie has a grain of truth to it. Mortgage interest is deductible. Unfortunately many will not benefit from the deductibility of the mortgage interest they pay because they don’t itemize. Also, paying the bank $10,000 in interest just so the IRS might give you up to $3,000 back is a really stupid move.

 

2.) You can afford more house. Yes, the more you borrow the more house you can buy. If every home was required to be purchased with cash the price of homes would drop precipitously.

Why this is bad advice.

Just because you can dig a deeper hole doesn’t mean it’s a good idea. Dig a deep enough hole and it’s called a grave.

 

3.) You can invest the difference for a higher rate of return. Fair enough. If you borrow the maximum you free up capital for other investments.

Why this is bad advice. 

This concept is fine as long as you don’t take on more house than you can afford. And you have to actually invest the difference. After 35 years in the tax profession I can count on one hand with fingers left over of people who invested money earmarked for additional mortgage payments into an investment account. Sure, some may have invested the money without a formal accounting. But my suspicion (gather from decades of experience) is that people tend not to save the money; they just increase lifestyle spending. All is fine until storm clouds appear.

 

7 ways to use your mortgage to build wealth.

7 ways to use your mortgage to build wealth.

4.) You don’t have to sell assets triggering a tax event to put more down on the house. Once again, fair enough. I used the same philosophy when paying my home off faster (fast!). Selling assets to put more down on a property can cause a serious tax issue. A larger mortgage (temporarily) makes a lot of financial sense.   

Why this is bad advice.

The larger the mortgage (the more leverage) the larger the risk something can go wrong. The investments you didn’t sell could decline in value. Selling to have a reduced mortgage means you forgo future gains on the sold investment. By keeping the asset and acquiring a larger mortgage you take on market risk while paying additional interest to boot.

 

5.) Investment gains. I hear it all the time, “The market goes up 10% a year while I’m only paying 5% interest.” It is true the market averages gains of about 10% per year on average. Some years the market increases more; other times the market gets cut in half! 

Why this is bad advice.

As we noted at the beginning of this article, leverage seems like a great idea. . . until you look under the hood. It might be easier to see with an income property.

The choice is to pay cash for the property or mortgage it to the hilt. If you mortgage the property you can invest the difference.

Let’s assume you purchase a $120,000 property for cash. If the value increases 3% the first year your net worth has increased $3,600, plus any profits from renting the property. Sound good, but the real estate agent introduced you to his banker friend and he says you can borrow $100,000. This means you can buy more properties (now you know why the agent recommended his banker) or keep the money in an index fund or other investment.

A good banker can make the numbers look compelling and this banker is gooood. You decide to borrow $100,000 for 15 years at a fixed 5%. We’ll use simple interest to keep this easy to follow. The value increased the same 3% as above (and also a common annual increase in value for real estate). The value of the property increased $3,600; the mortgage interest amounted to $5,000!

Yikes! You actually lost on the deal!

Maybe not. The property in a vacuum with the mortgage appears to have lost $1,400 the first year. Hopefully you didn’t invest in 5 more properties with the same mortgage deal because then you are hurting. The $100,000 you left invested earned, let’s say, the average 10%, or $10,000. Added together you made $8,600. It seems the mortgage was a good deal after all.

Buuuut. . .  You have to assume a good market (or a pretty good return on whatever investment you made) to justify the out-sized mortgage. If the investment under-performed, or, {gulp!} declined in value, you not only suffered a loss on the investment, the property has interest expenses in excess of the gain in value, increasing the total loss from the investment.

 

 

The above traditional advantages are not bad in and of themselves. Most people don’t decide between paying cash or a mortgage; they don’t have the money to pay cash so a mortgage is the only choice. Home ownership, especially as you begin your financial journey, almost always requires a mortgage.

Now we turn to non-traditional reasons to have a mortgage; reasons that might actually make sense.




Good Reasons to Have a Mortgage

Real, or good, reasons to have a mortgage are few. The risks of leverage are higher than most people anticipate. The odds are virtually 100% the economy will decline one or more times during the lifetime of a mortgage. Job loss or disability further add to mortgage risks. Rare is the person who doesn’t have a few times when the mortgage payment is a challenge.

All the negatives of the mortgage doesn’t mean the liability is totally worthless. There area a few reasons I can think of to have a mortgage, reasons worth their weight in gold.

 

There are good reasons to have a mortgage. Tax benefits are the smallest benefit. A mortgage can do a whole lot more when used properly.

There are good reasons to have a mortgage. Tax benefits are the smallest benefit. A mortgage can do a whole lot more when used properly.

1.) Free up capital. Leverage entails risk; no working capital can be a greater risk! If you pay cash for a property and have no working capital to deal with maintenance, insurance, property taxes or other expenses you can find yourself in just as deep as if you have a large mortgage.

Landlords should be acutely aware of this issue. Vacancies early in property ownership can cause serious financial harm. Without a mortgage the landlord should have a really good cash flow. But, you need a maintenance fund and resources to cover insurance and taxes should the property refuse to rent early in the ownership cycle.

The same can be said for those buying a primary residence. Without any emergency fund, a minor unexpected expense can create hardship.   

Solutions to potential problems. 

Up till now I’ve used the all-or-none approach. Taking out a small mortgage can free up capital to deal with any of the problems listed above.

Another very low-cost solution is a home equity line of credit (HELOC). For a couple hundred dollars you can secure a line of credit against the property. If things go well you have no additional mortgage expenses; if cash gets tight you have a resource to manage the bumps.

 

2.) Working capital. In business, investment properties and even your personal life, working capital is necessary to achieve your financial goals. Being property rich and cash poor means you have to pass on obvious opportunities for financial gain.   

Solutions.

When I bought my office building I didn’t want a mortgage. Profits are really nice when you don’t owe anyone anything. However, the seller wanted to spread his taxes out so I accepted a land contract (7 year amortization; seller allowed me to make a final lump sum in the fifth year).

But owning my office building requires ~ $200,000 of my net worth to be tied up in real estate. If an opportunity comes along I might have to pass and that would bother me. (It really would!) So I’ve always had a line of credit in my business. Originally it was attached to the building; now I have an unsecured line of credit. This allows me to smooth out the lumpiness of my business income (spring is good; year-end not so much).

I haven’t used the LOC for a few years so the only cost in $150 per year. Still, if I ever needed funds I can dip into the LOC for a very short term. This allows me to invest excess capital more quickly without fear I’ll need it before the good times return the following tax season.

 

3,) Motivation. This is the reason I wrote this post. I knew from the beginning if I ever paid off my mortgage, to be totally debt-free top to bottom, I would no longer have a financial motivation to get out of bed. And just as I predicted, I’m feeling the slump.

Financially I had the money to pay the house off decades ago without even a minor hardship. My logic was that I invested the extra money I borrowed so it was okay to keep the spur of a mortgage in my shorts.

Don’t worry too much, kind readers. I still roll out of bed around noon and put in an hour or two before calling it a day. (I’m joking, guys!)

Financial independence is different from debt-free! A mortgage always focused my attention. It helped me push my frugality (defense) while encouraging more income growth (offense). The frugal part has been good since the mortgage is gone; good habits continue on.

However, I find myself thinking more and more about how much I don’t have to do now that I’m mortgage free. I need $2,000 a month to live without a mortgage payment (a bit more during the winter heating season; a bit less in the summer). The nice thing about a mortgage is I needed lots of income to fully fund retirement accounts, add to non-qualified accounts and then pay extra on the mortgage. Without the mortgage money is no longer a driving force even on a minor scale!

 




And this is where we stop for now. My next post will deal with finding motivation when money is no longer an issue. Debt creates (or at least should) a crisis environment. As my good friend Mr. Money Mustache says, “It’s not a debt emergency; it’s a DEBT EMERGENCY!!!

I used a DEBT EMERGENCY to prod me in the past. Now I need to grow up and find motivation from other places. While debt can focus one’s attention, it is a poor way to achieve a goal! I used it way too long.

Debt is a tool with serious risks. Debt in and of itself isn’t bad, but it can create the illusion it is making things better when all it is really doing is increasing risk. We can do better than that.

Paying off my last liability has been liberating. I’m glad I did it. There are many ways to refocus attention so you can continue to create value in the world around you and in your life.

I think you’ll enjoy the answers I publish next week.

Happy Thanksgiving, American readers!

 

More Wealth Building Resources

Credit Cards can be a powerful money management tool when used correctly. Use this link to find a listing of the best credit card offers. You can expand your search to maximize cash and travel rewards.

Personal Capital is an incredible tool to manage all your investments in one place. You can watch your net worth grow as you reach toward financial independence and beyond. Did I mention Personal Capital is free?

Side Hustle Selling tradelines yields a high return compared to time invested, as much as $1,000 per hour. The tradeline company I use is Tradeline Supply Company. Let Darren know you are from The Wealthy Accountant. Call 888-844-8910, email Darren@TradelineSupply.com or read my review.

Medi-Share is a low cost way to manage health care costs. As health insurance premiums continue to sky rocket, there is an alternative preserving the wealth of families all over America. Here is my review of Medi-Share and additional resources to bring health care under control in your household.

PeerSteet is an alternative way to invest in the real estate market without the hassle of management. Investing in mortgages has never been easier. 7-12% historical APRs. Here is my review of PeerStreet.

QuickBooks is a daily part of life in my office. Managing a business requires accurate books without wasting time. QuickBooks is an excellent tool for managing your business, rental properties, side hustle and personal finances.

cost segregation study can reduce taxes $100,000 for income property owners. Here is my review of how cost segregations studies work and how to get one yourself.

Amazon is a good way to control costs by comparison shopping. The cost of a product includes travel to the store. When you start a shopping trip to Amazon here it also supports this blog. Thank you very much!

 



Keith Taxguy

21 Comments

  1. Chris on November 19, 2018 at 9:38 pm

    Great article! A little nit. Bad “advice.”

    • Keith Taxguy on November 19, 2018 at 9:44 pm

      That’s a big nit, Chris, and one I’m glad you pointed out. Fixed.

      And to think, my daughter teaches English as a second language.

      Thanks for pointing out the error, Chris. I like to look smart as often as possible and I need your help now and again.

  2. Yaacov on November 20, 2018 at 2:25 am

    Hey Keith

    Unrelated to the post, can’t seem to find the counter counting down to your last post.
    Does that mean you will continue writing and maintaining the blog (pretty please)?

    • Keith Taxguy on November 20, 2018 at 8:34 am

      The countdown is off, Yaacov. I forget which post I talked about this in, but I’m no longer looking for an exit plan. The once a week publishing schedule should be a minimum, allowing me to write deeper post and to spend time promoting the blog so traffic grows. I’m happy where I am and plan to stay. The problem was doing this alone. I have the foundation of a great team helping me plan ahead without overwhelm. Thank you for the concern.

  3. Mark W on November 20, 2018 at 5:29 am

    Keith – Enjoy your writing style on this article. Mixing humor, facts, and behavior to personify a point is appreciated. I think that a paid off mortgage and having a HELOC for rare (non-frequent) pre-determined opportunities is the best of both worlds.

  4. Katie Camel on November 20, 2018 at 8:35 am

    Thank you, Keith, for another great article! I waffle on whether or not to continue additional principal payments every month. Once I discovered FIRE, I stopped the additional payments and redirected that money to VTSAX. But I hated seeing so little movement on my mortgage repayment documents every month, so I picked up more hours at work so I could continue paying more on the mortgage AND invest as much as possible in VTSAX (403b and Roth are maxed out). This situation has been working for me for now, but you make a compelling argument with this statement: “Financial independence is different from debt-free! A mortgage always focused my attention. It helped me push my frugality (defense) while encouraging more income growth (offense). The frugal part has been good since the mortgage is gone; good habits continue on.”

    I wonder if I would lose some drive if I had no more debt (mortgage)? But I think I’d be excited by how much more I could invest. On the other hand, once my house is paid off, I’d have little incentive to keep my current hours, much less pick up additional ones. Oh well, my situation could be far worse! At least I can afford my mortgage and bills!

    • Keith Taxguy on November 20, 2018 at 9:36 am

      I’ll be dealing with motivation once you have no debt in my next post. It’s a serious — and under-discussed — topic in the FIRE community.

      • Katie Camel on November 21, 2018 at 9:43 am

        It’s not a topic I’ve seen anyone write about, nor is it something I’d given much thought to before you wrote about it, so it’s a great topic. I’m sure it’s especially valid, given our natural need for purpose — and money is the motivating factor in why so many of us pursue FI or get out of bed in the morning. Looking forward to reading it!

  5. Kristen on November 20, 2018 at 11:15 am

    Just wanted to say that The Steve Miller Band’s “Take the Money and Run” was on the radio while I read this which added a nice twist on things.

    • Keith Taxguy on November 20, 2018 at 2:46 pm

      Perfect!!!

      I should have embedded that song into the post so all readers could have had the experience. Too bad I don’t have rights to Take the Money and Run.

  6. Wayne Whitworth on November 20, 2018 at 12:51 pm

    Thank you Keith! I’m 56 and dealing with this issue. Quick question as a side note…are you purchasing more FB now that it’s taken a hit?

    • Keith Taxguy on November 20, 2018 at 2:45 pm

      I bought a minor amount of FB this morning at the open at 127. I’m not ready to chase anything at this point. Also bought a minor amount of AAPL too at 177 at the open. FB under 130 seems like a good value to me as long as you’re ready to accept some early pain. I’ll keep buying slowly with each decline.

  7. Marcelina on November 20, 2018 at 1:39 pm

    Hello Keith,

    Long-time reader from Canada, first time commenter. 🙂

    Congratulations on paying off your mortgage! I find your experience of not being motivated by money anymore fascinating. I’m 38. My husband is 39. We paid off our mortgage this past June. Ever since then, I find myself MORE stressed about money. Two reasons: one, we are feeling pressure to “trade up” and I feel a sinking inevitability that we will have another mortgage, even though that’s the last thing I want. We are a family of four living in a 899 sq ft apartment and everyone around us says we should buy a house. Houses are not cheap in our part of the world – hence why we stayed put for the last 12 years, but our kids are growing and might appreciate having their own rooms someday. And two, we are not yet financially independent so we’re funneling all of this “new found money” into our registered accounts (retirement and tax-free accounts).

    Looking forward to your next post.

    MJ

  8. JC on November 20, 2018 at 7:53 pm

    Keith,
    My mortgage is paid off. Do you have a recommendation for getting access to that money during a downturn? I have a HELOC, but it is my understanding that it is a variable rate.

    I’d love to be able to get access to my mortgage when the market corrects next time and put that seed money into underpriced mutual funds, but am wondering if there is an approach different than the HELOC

    • Keith Taxguy on November 20, 2018 at 9:10 pm

      JC, a HELOC is the only viable way. You can also re-mortgage the property, but the idea is to remain as debt free as possible. Personally, I don’t think interest rates are going to go all that high. Heck, the Fed is barely over 2% and it seems the economy isn’t strong enough to weather that rate. The real concern is inflation. If inflation starts climbing faster rates will follow.

      The HELOC is a powerful cash management tool. You can pay off the LOC with working capital, only to re-borrow the money as needed. This helps reduce the balance faster as well. I don’t have a HELOC on my home, but I may use the LOC at my business to fund additional index fund investing if things go down a lot.

      I’m not afraid of debt; I just don’t want to lock myself into anything long-term. The HELOC fits the bill.

  9. Cathleen on November 21, 2018 at 1:59 pm

    I’m not sure if reading this is contributing to confirmation bias or not- but I’d decided a few years ago to agressively (I guess?) pay off my mortgage- after I had comfortably maxed out my TSP, and both my husband and my ROTH IRAs, as well as fully funded a 6 month emergency savings plan, and contribute money towards investment savings.
    Basically I bought a house purposefully at half the amount I was “approved” for by the lending company- and am paying double the PITI (thus effectively paying $4k a month, which would be about what the lender said I theoretically qualified for). The first couple of years no extra payments were made as we rebuilt our savings. Now, we save an extra $800-1600 a month, and do all the stuff already mentioned above- and pay double the PITI- the total time for a $340k mortgage should be 11 years (so have 6 years more to go). I know plenty of people are on the other side of this: take your time on the mortgage because the market will return more, blah, blah. Yeah. Sure. This is a guaranteed “return”. And I can’t live in my index funds. I may look at recasting my mortgage, to see if the payment is lower, just to have a more flexible budget- such as if I wanted to move to a different house and rent the current one out, having a lower payment would be nice for cashflow- currently at $2100 for PITI, this house would produce NO cashflow (rent around here would be only $2000-2100).

    • JC on November 21, 2018 at 5:16 pm

      What will you do with your money when you pay off your house?

  10. OldStubbyGuy on November 22, 2018 at 5:52 am

    Another great post. We paid off our mortgage this past year. Like you, we had the money to do this many years ago. It was only after talking with Allan Roth, the premier fee only financial adviser in the United States, that it finally made sense to me to pay off the mortgage early. For all of the reasons you clearly illustrate, it was financially a great move. What I didn’t expect was the feeling of financial freedom that we experienced. For the first time in our adult lives, we didn’t owe ANY money to ANYBODY! That feeling is priceless and brings joy and contentment every day. It took me a long time to see the light. Perhaps if you had published this article earlier I could have begun the euphoria many year ago! I highly recommend paying it off to anyone who wants to add to their FI high.

  11. Wealthy Doc on November 22, 2018 at 5:55 am

    A lot of this is over my head. I enjoyed reading it though.
    All I know is I use to pay $10,000 a year in interest to the bank and now I don’t. When I paid it off, the banker said: “Man, I wish I could do that.” That made me think I was on the right track. That was about 15 years ago and I have no regrets.

  12. Paul on November 26, 2018 at 12:52 pm

    WA here is some food for though. A counter point if will-
    1.- Tax Advantages- True this only applies to people whom itemize. But, for those who do, it’s a real tangible benefit. But as they say, the tax tail shouldn’t wag the dog.
    2.- You can afford more house- Please realize that “more” can mean something besides square footage or acreage. You could also purchase a home closer to where you want to actually live and work (assuming you are still working to pay for the mortgage). Reducing commuting expenses in exchange for mortgage expenses is ideal. House “asset” values tend to rise while cars and commuting costs, once spent, have a “zero” investment return outside their initial utility.
    3- You can invest the difference- Yes, you can! And yes YOU did. AND YES YOU SHOULD. While your decades of experience of what others have done has revealed that this is the exception, as opposed to the rule, how many of your clients had the discipline to save the 100% house purchase you propose?
    4-Selling assets to trigger the tax event- Again how many people period have the discipline to “save” the $120k for the house outright? Let alone to deal with the potential “tax event” of liquidating the assets from another investment vehicle? And how much if the $120k is taxable investment returns anyway?
    5-Investment gains- easy way to check this- simply go online and type in the potential investment returns over any 30 year period. If the investment returns doesn’t handedly exceed the “fixed” rate of the mortgage you need to find an investment which does, accounting for risk of course. Of course the value will go up and down on the investment, that is expected. But remember the “fixed” P& I payment will remain the same every month. And of course you will pay property taxes forever.
    5+ your example of a “rental property” glosses over the “plus any profits” part. But, more importantly, dismisses the Principle payment of the mortgage. Let’s assume the property makes “zero” net profit and is 100% rented for the properties PITI. You state that you “actually lost on the deal” because the interest payments were more than the capital appreciation. What about the $4,600 in principle payments the renter paid? That’s $3,200 in “gain” the first year alone. And as the amortization shifts more toward principle over interest with every month the “gain” will only continue.
    You also bring up the point of capital or what I would call “liquidity”. While a HELOC affords you some of that liquidity at a cost (annual fee and usually an adjustable rate tied to prime, Having assets in a brokerage account would allow you the same access to funds with either a line of credit on the funds or simply selling them if necessary.
    Finally, motivation. Having a goal, any goal, is terrific! But being “debt free” is just that a goal. It works for many because it’s quantifiable and taps into your emotions. But you certainly can direct those financial and time resources toward something else that can be just as beneficial, or more. Perhaps fitness or health? All while earning returns on your investments over and above your fixed rate mortgage interest.
    Paul

  13. KMB on December 10, 2018 at 7:55 pm

    I feel like my mortgage provides some inflation protection in addition to freeing up capital for other projects. At 3.75% fixed for 29 more years it seems like a no brainer…

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