Is it Really Beneficial to Pay Off Your Mortgage?

As interest rates rise, is it really smart to pay off your mortgage? It is relative to your situation, salary, and the particular interest rate environment you are in. Also, what about those 15 year mortgages? Are they all that they are cracked up to be? I can show you how you can create your own 15 year mortgage if that is what you want. However, you might want to rethink it by the end of this article.

I have listened to all the pundits out there about paying off your mortgage and taking a 15 year mortgage to help you pay the mortgage off sooner. However, you need to ask yourself why you want to do this? Is it for peace of mind? Or is it because that's what you hear you should do? When it comes to peace of mind, which is an individual choice that no one should tell you otherwise. Nevertheless, let's examine what happens when you pay your mortgage off sooner.

15 Year Mortgages vs. Extra Payments

You can go to the bank and get a 15 year mortgage which is typically about a ½ per cent less than a 30 year mortgage. Or, you can just create your own 15 year mortgage by adding a certain amount of extra monthly payments to your principle.

Here is how you create your 15 year mortgage. All you have to do is get your financial calculator out or if you don't have one then go to "Interest.com". The hyperlink will take you to my calculations where I used a $150,000 mortgage, at an average rate today of 6.28%, applying $350 extra payments per month. The total payments with these extra principle payments are $1276.50 per month. You can put in your own figures to see how you can create your own 15 year mortgage for your own personal situation.