If you’re in debt, you may want to pay it off as quickly as possible. In some cases, though, prepaying your debt has no financial benefits and may actually hurt you financially. In these cases, you should let the debt ride while paying the minimum.
Mortgages: A Complex Situation
- Mortgage interest payments are tax deductible. If you prepay your mortgage rather than paying it off for years to come, you could miss out on significant tax savings.
- The equity in your home might not be as good an investment as others you could be putting that money into. If you pay down your mortgage instead of investing extra money in your retirement portfolio, you might end up with fewer assets in the long run.
Sometimes You Don’t Save On Interest
Too Much Repayment Hurts Your Credit Score