Should You Pay Extra on Your Mortgage Now?
Money Guy Show
Brian Preston, CPA, CFP®, PFS and Bo Hanson, CFA, CFP® | Fee-Only Fiduciary Advisors
4.7 • 3.1K Ratings
🗓️ 5 June 2023
⏱️ 24 minutes
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| 0:00.0 | All right, next up we've got a question from Tyler. |
| 0:10.1 | He says, with a mortgage interest rate of 6% these days, should I consider it as high |
| 0:16.7 | interest debt and pay on it more aggressively? |
| 0:20.7 | Or not? |
| 0:21.7 | What do you think? |
| 0:22.7 | So Tyler, this is a really hard question and one we're getting a lot. |
| 0:26.2 | If you follow the financial order of operations, review and hold the thing right, set up for |
| 0:29.7 | me. |
| 0:31.4 | If you follow the financial order of operation, there you go. |
| 0:33.8 | You did. |
| 0:34.8 | You'll notice that step number three is pay off your high interest debt. |
| 0:39.0 | In order to pay off high interest debt, you have to define what in fact is high interest |
| 0:44.9 | debt. |
| 0:45.9 | And we've come through a period where mortgages were nowhere near high interest debt, |
| 0:51.2 | right? |
| 0:52.2 | Two and a half, three, three and a half percent mortgages. |
| 0:56.0 | People was very, very, very, very, very hard to justify prepaying those, right? |
| 1:00.7 | Because it just did not make sense. |
| 1:03.0 | And so now we're in a place where mortgage rates have come up. |
| 1:06.2 | Mortgage rates have now crept up to where they're 6%, 7%. |
| 1:10.4 | And so this is the question that I would ask Tyler, is where are you in your financial |
| 1:15.2 | life cycle? |
... |
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