Friday, January 4, 2019

Paying Off the House is Looking More and More Sensible

I have always discouraged paying off the mortgage because you are likely getting a good enough return on your investments that the relatively small interest you pay on the mortgage is less.  Also, the interest on the mortgage is tax deductible (unless you have recently taken out a million dollar plus mortgage, but then you would be reading HuffPost or AntifaQuarterly, not this blog).  I was talking to my investment advisor at Fidelity today.  I mentioned my thought of paying off the mortgage and mentioned the deductibility.  He reminded me that because the standard deduction is now $24,000 for a married couple, it may not be useful.  Indeed, unless you have $5000 a month mortgage payments (because you bought a crummy condo in the Bay Area), or you regularly give $100,000 a year to charity, the standard deduction will make mortgage interest irrelevant.

The attraction is wiping out $1140/month in expenses.  We could probably pay all our bills from my disability check alone.

2 comments:

Random #57 said...

We could probably pay all our bills from my disability check alone.

Single point of failure....

Clayton Cramer said...

Or from my monthly IRA distributions.