Should You Pay Off Your Mortgage Early or Invest?

In this video, we'll explore the best ways to handle your extra money when you already have a mortgage. What's the smartest choice? Should you invest the money or pay off your home? We'll answer all these questions today.
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The information provided in this content is intended solely for educational and entertainment purposes. KC does not offer tax or investment advice. Please note that the content presented does not take into account the unique investment goals, risk tolerance, or financial situation of any individual investor and may not be suitable for everyone. Historical performance is not a guarantee of future outcomes. All investment activities come with inherent risks, including the potential loss of the invested capital.
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[@T_Le]

I've been doing a little of both on a 3% loan by adding extra a month to the mortgage towards the principal and the rest into a money market account. Then chunking the payments (10k) with the extra interest gain with the account. I find that chunking works better since the daily compound on the mortgage. I might recast after paying off 30k to reduce the monthly cost. My goal is to increase cash flow so I went with a 30 year mortgage just to give me wiggle room.

[@JohnBeezy3]

Good video

[@mattforthelikes]

The underlying message of the video is good but a few things make me cringe a little bit. If you were taking your own advice to heart, you would have a 30 year mortgage on your property which would minimize the amount of money you are paying towards your house and maximize the amount you can invest especially since the interest rate is so low (but this isn't a huge deal because everybody's risk/reward tolerance is different). The same thing can be said about the bi-weekly payment plan, an extra payment is exactly that, an extra payment that you can't put in the stock market. I also believe there are 2 types of bi-weekly payment plans, one of which makes absolutely no difference, where the other adds that extra payment (I believe it's called accelerated or something like that). I'm from Canada so it could be slightly different from the US.

[@KCMcKeownPersonalFinance]

So let’s talk about my primary. I contracted in January 2020 when my income didn’t start to really sky rocket. I planned on a 30yr as I do for all properties but by October I had enough to put 20% down (also wasn’t expected). My best friend is one of the top mortgage brokers here in TX & it came down to 15yr note and having my mortgage paid for by my roommate or 30yr and cash flowing. I opted for sub 2% 15yr also knowing that this would be paying down $2.5k a month in principal (far more than a 30yr) and I’ve leveraged that equity now to the tune of $400k and a HELOC to build my forever home. There won’t be another situation where 15yr makes most sense - but this was the time it did.