[USER]

Would like to get opinion.
I have about $93k in mortgage left, however it’s at 3.875% interest rate, but I’ve had the loan for 13 years or so.

Would it make sense to sell off brokerage account to pay this off or just pay it off monthly. 25 year mortgage, so have about 12 years for payoff.

I have about:
1. $400k in brokerage
2. $452k in 401k
3. $46k in IRA
4. $47k in Roth IRA
Just wanted to get overall thoughts from the group. Age 37.

I also have about $45k in an HSA which has just been for investment purposes as well.

Spending is anywhere between $75-80k per year depending on the year.

[Lisah]

No. Don’t pay off. You’ll make more on that money by having it invested.

[Ernest]

Math vs. feelings rehash – gone over a thousand times. Choose a side – and there’s no need to justify your choice to anybody.

[Lori]

You’re paying $290 a month in interest to live there and that’s going down.

The rest is either expenses you’ll continue to have (taxes and insurance) or transfer of equity.

No need to pay it off early imho.

[Stephanie]

To liquidate a taxable brokerage account, you’d need to pay taxes on the capital gains on the gains. At likely a 15% tax rate.

(There is a 0% and 20% range, but if you have a full-time job that pays a fairly average amount, it’d likely fall into this category).

If you were trying to pay off your loan sooner from your brokerage, you could turn off dividend reinvestment and use that money which is already paying taxes at an income tax rate to add on top of your monthly payments to pay off sooner.

But simply put as other have expressed, that interest rate is so low that even having that money in a HYSA or money market fund, you’d still be making more money from it in those types of funds than from paying it off sooner.

That money is still working for you vs sitting in a paid off house.

[Johnathan]

Due to your age I’m assuming your brokerage account is invested for growth & I certainly wouldn’t liquidate that type of portfolio & pay cap gains taxes to pay off a sub 4% mortgage.

I’m curious what’s appealing about the idea to you?

Maybe you have an angle that I’m not able to think of right now.

[Rick]

A paid off house is a poor investment. But it can be a great expense reducer. Both overall expenses but specifically helpful if planning for ACA subsidies.

You didn’t mention RE in your near future so I don’t see this being a need.

A paid off house is poor liquidity. You did not mention if may potentially sell in the next 3-5 years for any of a variety of reasons.

If you may, ehh why have the liquidity hit when you will pay off the mortgage when you sell.

Then there is the math which is covered in many other comments.
So, three strikes and paying off the mortgage is out.

Congrats on being in such a solid financial position that this is something you can consider.

[Dave]

Math says to not pay it off a day sooner than necessary.
How much is the monthly payment?

[Cody]

How is your investment portfolio invested?
Stocks, bonds, cash, etc.

[Author]

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