What is principal reduction? – Why should you never pay off your mortgage?
There has been a longstanding debate amongst homeowners about whether someone should pay off the mortgage early or continue making weekly, fortnightly, or monthly repayments. Although there is no right or wrong answer since everybody’s situation is different, there are a few circumstances where entirely paying a mortgage off is not recommended.
For homeowners that do not have a rainy day fund, paying off your mortgage quicker can actually do more harm. Actually, only homeowners that have the entire mortgage amount, as well as sufficient savings, should pay off their mortgage.
Another reason that you may not want to participate in a principal reduction on your mortgage is if you are getting tax benefits. Some states and cities in Australia offer their residents tax benefits if they are homeowners and have an active mortgage. This is helpful and can save homeowners money in the long run.
Before making a decision on your mortgage, it is best to communicate with an expert. At Mortgage House, there are dozens of mortgage and home loan specialists that are excited and ready to help you find the best offer!
Never Pay Off Your Mortgage Conclusion
Should you pay off your mortgage? Before answering this question, speak with an expert on the subject and take a look at your finances. Although repaying a mortgage loan does give you freedom, it is not the best choice for all loan borrowers and homeowners.