Pay Off Your Mortgage Early? It Depends

Not that long ago, people bought one house and stayed put in it. After 30 years, they owned it free and clear, and this was a good thing, so went the thinking. Some folks celebrated with a mortgage-burning party, where they took a match to their mortgage papers and rejoiced.

Then along came the housing boom years, and the thinking changed. Only fools stayed put in one loan, let alone in one house. The pressure was on to buy bigger houses and/or refinance into even lower-rate loans; who cared if those lower rates lasted 90 days, let alone 30 years? Anyone who couldn't keep pace would find themselves priced out of the housing market forever, we were told.

Well, forever came and went pretty quick.

Today, as people look to trim expenses and reduce household debt, you may be wondering whether to remain in the 30-year club or pay off your mortgage early if you can. The answer depends on many factors, including your stage of life and how strong a tolerance you have for its uncertainties.

Broadly speaking, experts say you should consider paying off your mortgage if:

• You are nearing retirement.

• You expect to stay in your house for at least several more years.

• You have enough liquidity from other investments to handle emergencies.