Mortgage early payoff, yes or no

[MNML]

Hi,

I have a $290000 payoff on my 30 yr mort, 24years remaining at 4.25% with a monthly payment of 1615.00, what would my annualized rate of return be if I pay it off? The current value is approximately $500K. 

thanks,

Mary

[tagteam]

You might want to read through the article at the link below, the key phrase of which is, "...if paying off your mortgage early leads to a return equal to your interest rate, that return is somewhat lackluster."

https://www.bankrate.com/mortgages/early-payoff/

[MNML]

Thank you for sharing. 

I’d already read that article.

The mortgage interest is front loaded, so the sooner we pay it off, the greater the savings, if that is the choice we make.

I was trying to calculate the percentage (risk free) rate of return for the early payoff. 

[tagteam]

How about the following article?:

https://www.themoneycommando.com/how-to-calculate-if-you-should-pay-off-your-mortgage-early/

If you do a web search, I believe there are online calculators for your specific scenario,

[MNML]

Thank you, I’d not seen this article, good info, but it was written in 2017. Deductions have changed along with the market, which changes the equation. I don’t have any 2nd mortgages, or any other loans to direct my resources.  I know this is complicated because there’s risk tolerance among other factors when one makes this decision.  

I wanted to simply get a number so I could see the bottom line and make a decision.  I dug around for several calculators, but none seemed to address specifically what I wanted.  Others have asked this question.  I guess I’ll need to do more searching or dig out the amortization table and do the math, assuming I’ll be in this home for probably 10 more years. Thanks for your help.

[tagteam]

I think all I can do is wish you the best of luck in your quest at this point.

I will add that, in my opinion, risk tolerance is of paramount importance; it is just not fun when the alternative(s) you chose keep you awake at night. Further, this does not have to be an all-or-nothing proposition; there is always the option of paying off somewhat less than the entire balance of the mortgage. FWIW.........

[MNML]

thanks! I'm not feeling it has to be all or nothing...trying to make a sensible decision, numbers help.

thanks for your prompt replies.

;o)