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Yes there is the psychological utility consideration of not having debt hanging over you. But in a less subjective sense aren't there also considerations of ris
by Tycho 7y ago
Yes there is the psychological utility consideration of not having debt hanging over you. But in a less subjective sense aren't there also considerations of risk of ruin and optionality? If you have no mortgage to pay off, you are free to do a lot of things you could not do otherwise (including buying more property to get rental income). If you have a lot of debt, you are in a leveraged position where some bad luck could bankrupt you.
Then there's stuff like, just cause you have a lot of money in your retirement account, doesn't mean you can actually consume it all, depending on the rules of your country.
- throw0101a 7y ago> If you have no mortgage to pay off, you are free to do a lot of things you could not do otherwise (including buying more property to get rental income). Except that you have to use some of your income now to pay down your mortgage so that you have better cash flow later. So that means right now you have less cash flow. The decision is: use cash flow now for mortgage to get more financial space later, or use cash flow now for other things but have less space later. TL; DR: Pay now or pay later.
- Tycho 7y agoBut the overpayment is optional, you can stop it at any time if it becomes inconvenient. Whereas as long as your mortgage balance is outstanding you are legally required to make the monthly payments.