I Have a Super-Low Rate on My Mortgage. But That's Not the Only Reason I'm Not Trying to Pay It Off Early

For many people, paying off a mortgage early is a big financial goal. And I can see why. Shedding a mortgage means freeing up cash you don't have to part with every month. And there's something to be said for being free of housing debt.

But I have no plans to pay off my mortgage. And while part of that has to do with my super-low mortgage rate, that's not the only reason I intend to hang onto my mortgage instead of chasing an early payoff.

I don't plan to stay in my home forever

In 2020, when mortgage lenders started offering record-low rates, I refinanced my mortgage from a 30-year loan to a 15-year loan. I also managed to get my loan's interest rate down to under 3%.

At this point, it makes absolutely no sense to pay off my mortgage early given the rate I have. For context, I'm earning upward of 4% in my regular savings account. So financially, I'm better off continuing to carry that loan and leave more money in my savings account, at least while rates are high.

The Federal Reserve is expected to cut interest rates at some point this year. And it's already paused interest rate hikes four meetings in a row. Eventually, it's likely that the interest rate on my savings account will fall below my mortgage rate. But even then, I won't seek to pay off my mortgage early.

The reason? I don't want to stay in this home for the rest of my life. I live in an area where property taxes are very high. I'm willing to pay those taxes so that my kids can benefit from a good school district. But once they're done with school, I have no plans to continue residing here.

As such, I'm not motivated to pay off my mortgage ahead of schedule. I don't see the point in doing that when this isn't my forever home. And I know I want to sell it eventually so I can downsize and relocate.

It doesn't always pay to knock out your mortgage early

If you're nearing retirement and have eight years left on your mortgage and five years left in the workforce, that's a scenario where paying off a mortgage early could make sense -- especially if your home is the one you want to stay in forever and the interest rate on your loan isn't nearly as low as mine.

But otherwise, know that carrying a mortgage isn't necessarily a terrible thing. And you don't have to stress yourself out financially to get rid of it.

Remember, carrying a mortgage has certain benefits. You can take a deduction for mortgage interest on your taxes, and you can free up cash for other purposes, whether it's emergency bills or other investment opportunities.

Of course, I don't love sending my mortgage loan servicer money every month. I'd much rather keep that money for myself. But still, carrying my mortgage through its scheduled payoff date makes sense for me. It might make sense for you, too, especially if you don't intend to stay in your home forever.