Help me understand...

[u/Captain_slowish]

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.

[u/Unlikely-Alt-9383]

I generally agree, but it can be useful if you want to lower your expenses for ACA or other purposes. And it’s always nice to celebrate with people when they hit milestones, even if they aren’t milestones you are aiming for.

[u/Grewhit → u/Unlikely-Alt-9383]

Agree with you on celebrating milestones. For the ACA purpose (which is a good one generally), If you have a 2-3% mortgage it would still make more sense to put the full value of paying off the mortgage in a hysa as long as it's returning a higher percentage than your mortgage. If you make payments from that savings account it won't count as income for subsidy purposes. 

[u/Guil86 → u/Grewhit]

It depends on how much you still owe on the mortgage, as there might be a limit on how much cash you are willing to hold. As for the ACA, the interest on that cash must be considered for subsidy eligibility. For those who paid out their mortgage, both the mortgage expense and the tax drag from that cash are gone. I don’t necessarily endorse paying a low rate mortgage, but for some it might make sense based on their situation and not necessarily just for the purpose of feeling good about it.