Bankrate follows a strict editorial policy, so you can trust that
we’re putting your interests first. Our award-winning editors and
reporters create honest and accurate content to help you make the
right financial decisions.
Key Principles
We value your trust. Our mission is to provide readers with
accurate and unbiased information, and we have editorial standards
in place to ensure that happens. Our editors and reporters
thoroughly fact-check editorial content to ensure the information
you’re reading is accurate. We maintain a firewall between our
advertisers and our editorial team. Our editorial team does not
receive direct compensation from our advertisers.
Editorial Independence
Bankrate’s editorial team writes on behalf of YOU – the reader.
Our goal is to give you the best advice to help you make smart
personal finance decisions. We follow strict guidelines to ensure
that our editorial content is not influenced by advertisers. Our
editorial team receives no direct compensation from advertisers,
and our content is thoroughly fact-checked to ensure accuracy. So,
whether you’re reading an article or a review, you can trust that
you’re getting credible and dependable information.
You have money questions. Bankrate has answers. Our experts have
been helping you master your money for over four decades. We
continually strive to provide consumers with the expert advice and
tools needed to succeed throughout life’s financial journey.
Bankrate follows a strict editorial policy, so you can trust that
our content is honest and accurate. Our award-winning editors and
reporters create honest and accurate content to help you make the
right financial decisions. The content created by our editorial
staff is objective, factual, and not influenced by our
advertisers.
We’re transparent about how we are able to bring quality content,
competitive rates, and useful tools to you by explaining how we
make money.
Bankrate.com is an independent, advertising-supported publisher
and comparison service. We are compensated in exchange for
placement of sponsored products and, services, or by you clicking
on certain links posted on our site. Therefore, this compensation
may impact how, where and in what order products appear within
listing categories. Other factors, such as our own proprietary
website rules and whether a product is offered in your area or at
your self-selected credit score range can also impact how and
where products appear on this site. While we strive to provide a
wide range offers, Bankrate does not include information about
every financial or credit product or service.
Paying off your mortgage before you retire may work well and even be an optimal choice for some that are approaching retirement or those recently retired. But it’s far from a blanket endorsement and here’s why.
Mortgage debt is low cost, often tax deductible debt. This is not 1981 when you had mortgage with a 16% interest rate, your net cost may be even close to zero on an after-tax, after inflation basis. Many people retiring already have much of their wealth tied up in the home. You may not have $300,000 dollars in your 401(k) but if you’ve lived in your home for 15 or 20 years, you may have $300,000 dollars – or something close to that – in home equity. Why concentrate more of your wealth there? Remember this – money in the bank or in your retirement account will pay the bills, home equity will not.
If you’re concerned about the strain on your budget of those mortgage payments and thinking you may breathe easier once it’s paid off, consider a reverse mortgage. This preserves your financial assets in tax advantaged retirement accounts and still accomplishes the goal of eliminating the monthly mortgage payment. The position you don’t want to be in is house rich, cash poor.
Being mortgage free doesn’t mean living free and you want to make sure you have a sufficient nest egg to pay the bills, with or without a mortgage.
Share