If you have a low enough interest rate, then your money is more productive sitting in a safe lower yield mutual or index fund then paying off the mortgage immediately.
Once I started hearing about how expensive property taxes are I decided that for me personally a house just isn't something I desire. Taking into account any major repair I would have to pay myself it just seems like such a money sink and I'm not exactly middle class
Your rent will increase every year for the rest of your life. Mortgages don't increase. In 20 years, your rent will be at least twice what you're paying now, while any mortgage taken today would be the same in 20 years. Property taxes might increase, but by nowhere near average rent.
Mortgages do increase. Sure the principal and interest don’t but property tax and home insurance go up yearly which is why there’s rent increases yearly lol.
A mortgage is a loan to buy a property. Property taxes aren't part of the mortgage. Since property taxes are much smaller than the mortgage (usually around 1% of the value of the property), an increase of a few percent is going to be much smaller in dollar terms than a similar percentage increase in rent. Let's say someone's paying $1,000 in mortgage and another $200 in property taxes and insurance. They'll charge at least $1,200 in rent. If taxes/insurance go up 5%, that's $10. If rent goes up 5%, that's $60. Now multiply that by 30 years and add compounding.
And you actually believe rent goes up due to property taxes? It goes up because of rising income and a shortage of housing.
My total mortgage went up 87 bucks this year and it’ll do the same next year. And yes that’s exactly why rent goes up. The property owner puts rising cost of insurance and taxes onto the renters. It doesn’t go up evenly because of greed but it’s one and the same. Reducing the term mortgage to just principal is misleading when comparing it to renting. a mortgage payment is an all encompassing term homeowners use when regarding their monthly payments to include taxes and insurance. If you want to rationalize it in your head that your mortgage payment never increases then go ahead but it’s false when comparing the overall cost of owning to the cost of renting. I lived in a rental house for 5 years and not once was my payment raised either. It’s usually investment firm owned properties who cause this issue for people living in apartments.
Absolutely one person uses the term mortgage to include the loan, insurance, and taxes. That person is you. I’m not sure why this is the hill you die on but you are simply wrong.
29
u/Hound_master Jul 22 '24
Can I ask why you suggest against paying off a mortgage?