Dawn70 - Understand you don't have a mortgage (awesome!), but still a great discussion on finances...

Originally Posted by MLCxH
Originally Posted by AndrewP
Paradoxically we changed our mortgage to come out weekly - the more frequent payments mean a fair savings in interest and faster pay-down.
While paying down debt is usually a good thing, mortgages can be an exception in some cases. For one, mortgage interest can be tax deductible. Secondly, if your loan was financed or refinanced in the recent past you probably have a good rate (though likely not the case in 2003) and you probably can get a much higher return using the money for paying off other debt or investing it elsewhere instead of paying off the mortgage early.
Mortgage rates were at an all time low at one point last year and I actually thought about refinancing to pull equity out and invest it when the market pulls back (at some point it'll retreat 10, 20, 30%), but I have such a low rate already it was a harder sell plus the peace of mind DnK alludes to below. I (and ExW by default) was fortunate to buy into the market in a retirement vehicle right when it bottomed out due to COVID and that investment has since doubled in less than two years.

Originally Posted by DnJ
Any extra monies could/should be utilized to pay off high interest loans first. Then those loan payments can be included in the extra monies and pay off the next loan faster as well. Mortgage last.
Completely agree. Always think of the return, so tackle the higher interest rates you're paying first, and maximize the higher rates of return.

Originally Posted by DnJ
Of course, once the house is paid off, the bank can’t take it from you. That security is pretty good. So, at times, it makes sense to secure one’s dwelling ahead of the most theoretically effective schedule.
Peace of mind is the intangible in the equation, and may make it worth it despite the investment math. Hard to quantify the knowledge you own your own home. The good news with extra/early payments is even if it doesn't "maximize" you're return you're still better off building equity for the future than blowing it on some other item you don't need.

Originally Posted by DnJ
I’ve even paid off my mortgage before any investing. No point getting 2% while paying 5% - that kind of thinking.

The bank was never to pleased with my decisions. And always tried to talk me out of my course and have me invest in some sort of product. Ha, the bank is there to make money; not make DnJ money. Take its “advice” with a grain of salt. Heck, skip the salt, and do your own math. Lol
That said, what if you had invested those extra payments into a broad based stock index instead? The S&P500 is up 250% in the last ten years! Granted, there's risk...it could decline.

Originally Posted by kml
It’s a chronic topic of debate in personal finance circles, whether to pay the mortgage off early or not. A lot depends on your taxes, your other investments, and current mortgage and bond rates.
Good debate. Think it partially depends on the person too and their financial discipline.

Originally Posted by kml
For somebody in their thirties, it might make sense at these interest rates to put all their extra money into stock market investments instead.
Very true.

At separation I decided to buy a new vehicle. I was running my previous into the ground to get the most value out of it but it was older and less reliable plus I needed something bigger for the kids (ExW had the "main" family vehicle we used for long trips). At the time I decided to finance the purchase because interest rates were relatively low and I had uncertainty about how the D would play out financially. More recently I decided to pay it off completely because I was getting 0.4% in an online savings account but paying 1.9% financing on the car. Now if the stock market pulls back maybe I could've used that cash to buy in low and in the long run be better off, but made the decision in the short run to save the 1.5% difference over the next few years.

Anyway...good to think along these lines when it comes to finances.


Me:39 Ex-W:37
M:7 T: 9
S:6 D:3
BD/IHS/Confirm EA/PA: Feb '20
OM1 affair ends: May '20
W/OM2 & moves out: June-July '20
W files for D: Jul20
OM2 confirmed: 9/2020
Divorced: May '21