From time to time, someone asks me about either paying off their mortgage entirely or paying down their mortgage in the smartest possible way. Does it make sense to pay off your mortgage? Does it make sense to pay down your mortgage? In my experience, the answer to both of these questions is actually more of a personal preference than one of actual dollars and cents.

Should you pay off your mortgage early?

Before you can determine the smartest way to pay down your mortgage, you must first answer the question of whether you want to pay off your mortgage early. Here are six simple questions to consider:

Does your employer match any retirement funds you save?

  • Do you have any debt other than your mortgage?
  • Do you have at least 24 months of living expenses in liquid assets?
  • Do you currently owe more on your mortgage than your home is worth?
  • Does the amount of your mortgage bother you?
  • Do you think you could get a better return on your money if you invested it in other things?

If you have considered the pros and cons of paying off your mortgage early and have decided that it is a goal, then it is time to start evaluating different payment strategies. You can always make bi-weekly mortgage payments and or make extra principal payments. No matter what you decide paying down your mortgage can never hurt.