Should I pay my mortgage off early?

These 3 questions should help you decide.
Speak with your Advisor for more information

Ever wonder if paying off your mortgage early is a good strategy? If you have the money for it, it might look attractive but there are several things to consider. For example, would you be better off investing that money elsewhere? Are you giving up tax benefits? Are there other mortgage options besides paying it off? Answering these questions can help you make a smart decision.
1. What are my financial priorities?
The money you would put toward an early mortgage payoff could be used for additional financial security, such as:
  • An emergency fund that covers at least three to six months of your monthly expenses
  • Consider increasing the amount you are contributing to your retirement plan
  • Start saving for college costs or increase the amount you are currently saving
  • Look at other investment options that could potentially yield higher after-tax returns or more financial flexibility. 

Your TIAA advisor can help guide you to a financial solution that fits best with your goals and objectives.
2. What benefits could I get if I pay off my mortgage early?
Paying off your mortgage can bring you peace of mind. With no mortgage, you’ll have increased the equity in your home. You could then tap into a home equity line of credit or loan to cover renovations, a down payment on a second house, or unexpected medical expenses. With any financial decision, you’ll want to understand how those decisions may impact your credit. In general, the longer you have had your mortgage, the more incentive you have to pay it off early. Mortgage interest is tax-deductible, so paying it down on its regular schedule can lower your tax bill. But that tax advantage decreases over time. The longer you’ve had your loan, the more you pay toward principal and the less interest you pay each month.
3. Should I pay off my mortgage, refinance, or accelerate payments?
You may also have the choice of refinancing your mortgage to a shorter term loan, which you may be able to pay off sooner. With today’s low interest rates, you may be able to get a lower interest rate while also saving on your interest expenses.
Refinancing has a price, however. You may need to pay various costs such as closing costs, title insurance, attorney’s fees, and other expenses. Determine whether the savings you’ll get from a lower interest rate will offset the costs of refinancing. Often, it can take more than a year for the savings associated with a lower interest rate mortgage to cover these costs. If you have only a few years left on your mortgage, it rarely makes sense to refinance. For a quick assessment of whether refinancing makes sense for you, Bankrate offers a mortgage calculator to help you do the math. 
As an alternative to paying off your mortgage entirely, you could pay slightly more toward your monthly payments or add another payment each year. Making even one extra payment each year can reduce your loan term and you’ll pay less in overall interest.
Your TIAA advisor, along with a TIAA Direct® mortgage loan consultant, can help you weigh the impact of accelerating your mortgage payments–or paying it off entirely. Together they can help you put together an effective plan.
We’re here to help
Before you make any mortgage-related decisions, make sure you understand your financial priorities and do what’s right for you. Your TIAA advisor can take your needs and objectives into account and help guide you toward achieving your overall goals. Whether it makes sense to revisit your mortgage terms or pay down your mortgage early, your advisor can connect you with a Mortgage Loan Consultant at TIAA Direct to help you put together an effective plan.
Changing your mortgage may impact your term, rate, APR and monthly payment – review various options and make the right decision for you
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