"They know that Dave would say yes, if you have the cash to pay off the mortgage, you should absolutely do so, and free yourself from debt. However, this individual also recognizes the opportunity this cash presents. As they look to sell a second home in 2026, they know that the proceeds from this sale, along with some other funds set aside, will be sufficient to pay off their primary mortgage."
"The Redditor says they have "low six digits" of other investments that will remain untouched. However, the current primary home is carrying a very affordable 3% mortgage rate, and they recognize that dropping the money from the second home into a safe Vanguard ETF represents a much bigger opportunity - historically, when accounting for property taxes, insurance and maintenance, real estate returns lag the stock market."
A homeowner must choose between using cash to pay off a primary mortgage or investing in Vanguard ETFs. The homeowner expects proceeds from a second home sale in 2026 that, combined with set-aside funds, can fully retire the mortgage. Existing Roth IRA and other investments in the low six digits will remain untouched regardless of the decision. The current mortgage carries a favorable 3% rate. Investing into broad-market ETFs is seen as a potentially higher-return option because, after property taxes, insurance, and maintenance, real estate returns often trail the stock market.
Read at 24/7 Wall St.
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