is it a good idea to pay off mortgage early?

[Aviat10n]

Hi, I'm trying to figure something out for my parents and could really use some help.
They've been paying a little extra on their mortgage principal every month, just a nice round number.

I was playing around with a prepayment calculator I found online and it's pretty wild how much earlier they could be debt free.
But then my friend told me something that kind of threw me off.
They said that all the interest my parents are saving by paying extra is interest they can't write off on their taxes.
My folks are in a high tax bracket, so they could be deducting a good amount.

I'm trying to explain to them that it still makes sense to pay it off. My argument is that being completely debt free earlier has to be a good thing, right?
And I figure saving 100% of the interest is a lot better than getting to deduct maybe 30% of it. What do you guys think? Am I missing something?

 

[heeheeecub]

You have a lot to consider when paying off the mortgage early. Being debt free feels really good. However your friend's point about the tax deduction is also a valid part of the equation and something to factor in. The value of that deduction can change depending on tax laws and your parents' specific financial situation. Some people also see the money that would go towards extra principal payments as a potential investment opportunity. The things is... Money could potentially earn a higher return in the market than the interest rate on the mortgage. This is a common perspective and it's really about risk tolerance and financial goals. Ultimately it comes down to what makes your parents feel most comfortable and secure whether that's being debt free or having more investment flexibility.

 

[russel35]

Sometimes, paying extra isn't smart, like if your parents lack savings or could earn more elsewhere, or need cash more than equity. But if they're stable and just want to be debt free, you're right on track. You get it.