pay off mortgage or invest

Should You Pay Off Your Mortgage or Invest Your Money?

Having a nest egg of savings gives you peace of mind. Whether you’ve worked hard to save more than you spend or recently obtained an inheritance, it can be tough deciding what to do with your money. Should you pay off your mortgage or invest your money?

Our team of mortgage brokers in Tucson at Priority Lending LLC can answer your questions about whether to pay off your mortgage or invest the money. Call us at 520-531-1119 to learn more, and keep reading to know the benefits of each decision and what factors you should keep in mind.

Paying Your Mortgage Early

Your mortgage loan likely has monthly payments that you pay off over the loan term. However, if you have enough money saved, you can pay in advance. Here are some of the pros and cons of paying your mortgage ahead of time.


  • Low risk: There’s no risk in paying your mortgage off early. If you were to invest that money instead, investment returns vary, and there’s no guarantee that your investments would make a profit.
  • Less debt: Paying off your home in full means that you’ll have less debt, helping you reach your financial goals. 
  • Smaller interest payments: The more you chip into your mortgage, the less you’ll have to pay in interest.
  • You own home equity: Home equity access increases when you pay off your mortgage.

However, choosing to pay off your mortgage over investing may lead to prepayment penalties. Your portfolio will also be less diverse, and you won’t benefit from a home tax deduction.

Investing Your Money

When deciding whether to pay off a mortgage or invest, you’ll want to be familiar with how investing your money works. Here are some of the benefits of this strategy:


  • Higher risk means higher potential reward: Investing in the stock market can yield greater returns than what you would save on your mortgage interest. 
  • Tax benefits: If you invest in certain types of retirement accounts, you can reap great tax savings.
  • Employer match: If your employer offers a sponsored retirement account like a 401(k), they might match your contributions.
  • Access to liquid assets: If you find yourself needing cash, selling your investments is much easier than selling your home.

Be aware that there are no guarantees with investing. If the stock market is strong, you may make money, but you could also lose money during bad economic conditions. Consider your risk tolerance, and act accordingly.

Important Factors to Consider

Before deciding whether to pay off your mortgage or invest, make sure you have an emergency fund, regular retirement contributions, and have paid off high-interest loans. Investing or paying your mortgage off in full before taking these steps is not the best financial move.

Learn More About Mortgages

For over 25 years, our team at Priority Lending LLC has provided Tucson homeowners with quality mortgages. Our experienced professionals know whether you should pay off a mortgage or invest and can answer your questions for you. Learn more about mortgage rates and inflation from our team. Contact us today at 520-531-1119 to learn about your mortgage pre-approval options.

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