Should You Pay off Your Mortgage As Quickly As Possible – Or Invest?

Posted by Lauren Spencer on Thursday, August 15th, 2013 at 9:01am.

Here’s a tricky question that has been on the mind of many Santa Cruz home owners – should you use any spare cash that you have to pay off the mortgage on your home as quickly as possible or would it be a better plan to invest your money? This is one of the most hotly debated questions in the world of personal finance and either option has been defended with plenty of reasons from experts. 

The truth is that there are a lot of considerations to take in mind when you are thinking of whether you should invest or pay off your mortgage. On the one hand, paying off your home as soon as possible will mean that you save thousands of dollars on interest over the length of the loan and that you will have the satisfaction and security of finally fully owning your property. However, on the other hand if you have a low mortgage rate you might be able to make more money from very smart investing over the years.

Here are some of the pros and cons to consider before making your decision:

Advantages of Paying Off the Mortgage Early

One of the biggest advantages of paying off your mortgage as soon as possible is the peace of mind that you will be able to enjoy when you own the property. You will be able to know that the home you live in is 100% paid for, which gives you security as well as frees up your income to spend or invest in other things.

Advantages of Investing the Money

On the other hand, one of the main reasons to invest your money rather than using it to pay off the mortgage is that mortgage interest rates are usually quite low compared to what you could earn from an investment. For example, if your mortgage is only charging a 5 perfect fixed rate but you could earn a 7 percent return from an investment, it makes more sense to invest.
Another factor to consider is the fact that inflation will eventually bring down the value of the dollar. This means that several years from now, your mortgage payments will cost less than they do today, relative to your income. This is one of the advantages to paying off your mortgage over time.

These are a few things to consider before deciding whether to pay off your mortgage quickly or to invest your extra money. In the end, the decision will be up to you and will depend on your own personal financial situation.
For more tips and suggestions regarding mortgages and Santa Cruz property, call me at [phone] or email me at [email].

For more information about buying and selling a Santa Cruz home, email me at or give me a call at 831.662.6522 or email me at if you have any questions.

For additional real estate information, please visit my home page at

you own the property

decision will be up to you

sense to invest

About Lauren Spencer

Award-Winning Santa Cruz REALTOR®

Lauren Spencer is your local real estate expert, specializing in Santa Cruz real estate and surrounding communities—this is where she lives, works, and plays too. Let her know your questions about the community and county and she'll be happy to fill you in on all you want to know! Lauren Spencer has consistently been voted best local REALTOR in Santa Cruz and is always happy to offer her advice and expertise. Call her at: 800.226.4717.

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