Selling stocks to pay off a mortgage may not be a good plan if the mortgage interest rate is low. In a scenario where the mortgage rate is around 2.65%, it is considered financially beneficial to keep the loan and invest the capital instead. Eliminating the mortgage payment would provide more monthly cash flow but could also lead to missed investment returns. Emergency savings of $15,000 can help manage unexpected expenses, especially with health-related costs increasing over time.
If you're paying just 2.65 percent, as many people are who bought or refinanced during the pandemic, you're far better off keeping the loan. Why? Because you're hardly paying any interest and you'll easily earn more than that just keeping your money invested.
Paying off the mortgage would give you peace of mind and an extra $2,600 per month, but it's crucial to consider your interest rate and timeline.
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