Pay off mortgage early or......

Should one pay off a mortgage early or invest those funds? I, like many people, take my monthly payment, divide by 12 and add that to each monthly payment effectively making one extra payment per year. I've been reading lately that it may be better to take those funds and invest in order to receive a better return. There's also the tax deduction thing to consider. Thoughts?

 

Yes, historically, if you invest you will come out much better than paying the loan off faster. Lately, though, with the way my stocks have been going, I'm on the fence. I do have long term faith in the stock market, however, that in the LONG term I will get better gains than my guaranteed 5% (my 1st mtg int rate) return on paying my mortgage off faster. If you are talking about a higher interest 2nd mtg...then I would def pay that off first.

 

there's no question that a mortgage at <10% is better to pay off as slow as possible. with the tax deduction, and an expected gain in the stock market of 7-8% on average, you'll come out at least equal and likely ahead.

That said, I pay it off faster as I HATE debt with a passion. 15-year mortgage at 4.625%, and I make extra payments all the time - it's my only debt and I want it gone. Peace of mind carries a high price in my book, and while cash in the bank would offset that feeling of a large debt, cash in investments wouldn't, and unfortunately if the world ever takes a big dump on us, it'll take down houses and other investments at the same time...