So bbw your saying instead of putting extra towards the principal to pay off early invest it somewhere? Thatís crazy ! You want to get a retuning you money howís this in 1996 we paid 84,000 fir our house interest was 7% ( no the world didnít end) Paid 150 per month extra until we refinance at 4% anyway paid the house off in 12 years Now our house was appraised for 315,000 Howís that for an investment Plus no longer have a 800 bucks a month house payment Instead of putting money some where you hope is going to get 4 percent return why not pay off a loan that YOU KNOW is costing you interest Any interest you pay is wasted money When the crash hits and itís coming those people that ran out a mortgage a paid for home and stuck it in a over inflated stock market or Bitcoin are going to be sorry 2008 all over again High fuel was the trigger then Now we have high everything
High fuel wasn't the trigger in 08.
How's that for an investment? Not all that good unless you didn't pay any RE taxes, insurance and upkeep. Looking at it from a strictly investment standpoint, you would have been far better off in an IRA in an IRA or incoming producing framland. From a strictly investment viewpoint BBW is correct. It's math pure and simple. No one can guarantee 4 percent but here is something to think about. If you have a loan for 4 percent today and inflation is 8 percent you are making 4 percent profit on that loan as long as inflation is 8 percent. I know it's hard to grasp yet simple math.
harttoflow, what to do is a personal decision. There is something to be said about owning your home free and clear and the sense of stability that comes with it. My recommendation is to take into consideration several factors and do what you think is best for your tolerance to risk.
One thing that was mentioned by Dana is if you pay it off and then have to borrow to build the shop, pay for the shop in cash and keep making the home payments. As he said your old loan will be at a lower interest than the new one will be.
Good luck to you.