Should you pay off your mortgage early?
Regardless of your rate, the total amount of interest you may pay over the life of your mortgage can seem like a staggering amount. It's one of the reasons many people set a goal to pay down their mortgages early. But pre-paying a mortgage may not be for everyone.

Here are some reasons to consider it:

• Paying your mortgage off will make you completely debt free and just as important, you have all the funds you'll need for retirement already saved.
• You are a legal resident of a country, such as Canada, where you do not receive a tax break because you carry a mortgage.
• Currently, you do not receive a tax break on your mortgage interest. If your mortgage is small, your interest may not exceed the standard deduction the IRS gives non-itemizing taxpayers. Without that tax break, the actual cost of your mortgage is higher.
• You pay private mortgage insurance (PMI). If you have less than 20 percent of equity in your home, making extra payments will build more equity sooner, allowing you to cancel your PMI. And eliminating PMI will reduce your monthly payments and non-deductible mortgage-related expense.

But for some people, there may be issues that make you think twice...    

• Your mortgage contract includes prepayment penalties.
• You have other high-cost debts. Credit card interest rates are often more than twice that of most home mortgages and they're not deductible as a mortgage is. Any extra cash should go toward paying off the balance of those first.
• You want more money in your pocket now.
• You are in a high tax bracket and this additional deduction would lower your income tax bracket as well as your taxes.
• You want to put money into another investment such as the stock market or real estate.

In brief, O'Neill Mortgage Associates' position is that if you have NO debt other than your mortgage AND you have saved all that you need for retirement, paying off your mortgage would be your LAST step to financial security.