Are there downsides to paying off my mortgage early?
A clear look at the tradeoffs behind accelerated mortgage payoff.
Are there downsides to paying off my mortgage early? This question often comes up when homeowners weigh the freedom of being debt-free against other financial priorities.
Answer
Paying off a mortgage early feels freeing and saves interest, but there can be downsides. Extra payments tie money up in home equity, which is harder to access than cash or investments, especially during emergencies. Some loans have prepayment penalties, so check your note and ask your servicer before accelerating payments. You may also miss potential growth from investing extra funds in retirement accounts or diversified portfolios. Additionally, once the mortgage is gone you lose its interest deduction if you itemize, though many households now take the standard deduction instead. Balance emotional benefits against liquidity, diversification, and long term return considerations.
Try different payoff timelines using our mortgage payment comparison tool to see how extra payments change long-term costs.
Browse related questions in the mortgage FAQ section.