Sun Jun 30 2024, by Tyler Gardner

The Top Reason I Refuse to Pay Off My Mortgage Early

Here is the number one reason that I will not even put one dime towards paying down my mortgage early.

I'm Tyler, a former financial advisor and portfolio manager, and now I create financial content for free so that you don't have to pay for it.

Recently, I had lunch with my mortgage officer, seeking inspiration for content. I asked her if she thought it was a good financial decision for people to pay off their mortgages early right now. She laughed.

I asked, “So is it?”

She replied, “Tyler, for us, the bank, it's a great idea. We would love to get that money back and get all of those low-interest rate loans off of our books.”

Now, I don't know much, but I do know this: When a bank lender tells you they want their money back, you don’t give it to them. It means there’s a much better opportunity out there.

I know what you’re thinking: “But Tyler, that mortgage payment is a guaranteed return.”

Keep in mind, I was having lunch with a representative of a regional bank. She wouldn’t want the money back unless she knew there was a guaranteed better opportunity. And in a rising interest rate environment, there is.

Currently, high-yield checking accounts are returning 6%, high-yield savings accounts are returning 5.5%, CDs are returning 5%, and money markets are at 5%. Additionally, investing directly in short-term treasuries can yield similar returns.

So yes, I could save an additional $80,000 by paying an additional 20% on my mortgage. Or I could earn about double that by investing in short-term and stable securities backed by the full faith and credit of the United States government.

Yeah, I'll take that bet. If any of this is helpful, please like and follow, and I'll keep trying to get you one step closer to where you need to be.

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