Mortgage just north of 5%? Pay it off? Depends, but I wouldn’t.
If people believe we are headed to much higher inflation due to Zero’s insane Spend and Borrow policies, it would make sense to keep the low interest mortgage, hold onto the cash, in expectation of getting nice fat juicy yields on CD or bonds later, rather than burning the cash now to invest at next to zero.
If inflation doesn’t go up, and rates stay as they are now, it would probably be better to pay it, and have the certainty of no debt.
If inflation kicks up, it would be really sweet having a 5% note, when you can get 10% or more on a CD. Furthermore, the mortgage balance will seem like peanuts if inflation is high for a few years.
I remember buying my first home in the early 80s, when mortgage and CD rates were north of 15%, and envying the old geezers with their tiny $20-40K mortgages that they were paying 4 or 5% on. I’ll bet when they bought the homes initially, a 50K mortgage seemed HUGE, but then inflation gradually ate away at the real size of the mortgage.
I understand the inflationary aspects of paying a mortgage with future dollars of less value. However, with todays environment involving the government cancelling and re-writing existing contracts, ala GM and Chrysler bondholders, I can see them doing the same for existing mortgages with interst rates below the rate of inflation.
They, the government, have shown they will obviously protect and enhance the coffers of the financial industry.
I know, I know, people would squeal and raise heck, but look what they have done in just six months. Just imagine, monthly mortgage payments going from a thousand bucks @ 5% to fifteen hundred @ 8%. Wow, an adjustable rate mortgage you didn’t sign up for. All for the good of the economy to prevent its collapse. Now where have we heard that before?