pay off mortgage or investMoney, Money, Money 

Extra Money Matters: Pay off Mortgage or Invest?

If you’ve found yourself with some extra cash, you may be wondering what to do with it. You could just blow it on some unnecessary expense, of course, but that would not be the wise financial move.

If you’re looking to do something wise with your money, you may find yourself wondering: pay off mortgage or invest? Below we weight the pros and cons of both options. Read on to decide the best move for you.

Pay Off Mortgage or Invest?

Both approaches have a variety of pros and cons. When you understand the benefits and drawbacks of each choice, you’ll have a chance to make the one that best fits your situation.

Paying Off Your Mortgage


Mortgages are extremely complicated. They involve quite a bit of math. Getting rid of this financial weight hanging over your head can be a serious gift.

That’s why many people choose to pay off their mortgage as quickly as they possibly can. If you come into a bit of money and strongly feel that you want to be rid of your mortgage once and for all, know that it’s not a bad idea.

The pros include peace of mind, smaller monthly expenses, and saving quite a bit on interest rates in the long run.


The most obvious con of choosing to pay off your mortgage rather than invest is that the money is gone. Once you use your extra cash to pay off your mortgage, that’s it. There’s no chance that money can grow or increase.

You made a wise move on what to do with it, yes, but the money is not going to grow any larger now. Investing means that you still have the money, and there’s a chance it will grow to an even larger sum. But paying off your mortgage means that you have eliminated debt and nothing else.

Choosing to Invest


Because mortgage affordability is at a high, many people — especially seniors — are choosing to keep their mortgage and invest instead. The current low tax rates and mortgage rates means it’s a good time to invest, and not necessarily a bad time to have a mortgage.

Choosing to invest can pay off big time. You may eventually end up making enough to not only pay off your mortgage, but also come out with even more money. When investing goes right, the pros are clear. You come out the other side with even more money than when you started.


When it comes to “pay off mortgage or invest,” to invest instead of getting rid of your debt can be a risky move. After all, a payoff from investing is not guaranteed.

When you eliminate debt, the benefits are sure. You will no longer have the debt weighing over your head. But when you invest, you’re taking a chance with your money. You might end up losing the money and still having your mortgage to pay off.

Make the Best Decision for You

Of course, as with most things, the answer is not black and white. There are many factors to consider when making your decision. Depending on your situation, what is right for another person may not be right for you.

Pay off mortgage or invest? By now it should be clear that there are pros and cons to both options. Making this decision should not be rushed. Do your research until you are confident that you’re making the right move for your particular situation.

Related posts