Is it Worth It to Pay off my Mortgage Sooner?

Exploring the Tax Benefits of Different Mortgage Terms

Hello Kristin, I am curious about the tax implications of a 15-year mortgage compared to a 30-year mortgage. Should I pay off my loan early, or take more time to pay it off? Sincerely, Curious in Chicago

Hello Curious, This is a great question. While a longer mortgage term means lower monthly payments and more tax deductions on mortgage interest, paying off your loan early can save you money on interest in the long run. The decision really depends on your personal situation and financial goals.

Factors like your monthly payment, mortgage interest rate, type of loan, and tax deductibility are all important considerations. Keep in mind that the Tax Cuts and Jobs Act limits the mortgage interest deduction to the first $750,000 of your loan. With rising interest rates, it may be beneficial to pay off your mortgage faster, especially if you have other debts to address or investment opportunities to explore.

Consider making extra payments on your principal balance or refinancing to a shorter loan term. Before taking any action, make sure to understand any associated fees. Ultimately, paying off your mortgage faster can free up cash for retirement savings and investment opportunities. Crunch the numbers and make the best decision for your financial future. Good luck! -Kristin

If you have financial questions, submit them anonymously for Kristin to address in a future column.