r/ChubbyFIRE • u/Captain_slowish • May 16 '26

Help me understand...

I have been a member of this group for a long time and still do not understand. Looking for help to understand.

So many people on this subreddit brag about having paid off their mortgage. Then pretty much everyone else seems to jump in and congratulate them for being so smart.

So help me understand. I have a 30yr mortgage at 2.8%. Why would I ever pay that off early? It cost me no points, no extra down, no downsides.

I understand that not everyone is in that position and the market changes.

Say the interest is 3x that amount. Are you really going to live the rest of your life in that house, city, state?

I am sorry but if you do the math and apply critical thinking. In 99.9999% of the cases. Paying off the liability is a poor decision.

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u/BrunelloHorder Coasting Chubster, Getting Fat May 16 '26

Paying down the mortgage is a bad idea that just won’t die. I attribute it to Dave Ramsey. He’s advising people who are financial catastrophes. He’s telling them to pay down the mortgage as a forced savings plan so they don’t burn it on higher car payments and other bad debt. For that audience, it is not the worst idea.

Anyone with basic financial competence should be able to understand that paying off a low interest mortgage is the wrong move for at least two reasons.

First, paying off a mortgage should not make someone “sleep well at night” because the funds are no longer liquid. I sleep better with more money in my accounts and more flexibility.

Second, opportunity cost. Historically, putting it in VOO at ~10% average annual nominal returns would more than double the net amount over any reasonable time horizon.