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It’s a common financial crossroads for couples: should extra cash go toward paying off the mortgage early or investing for the future? One offers peace of mind and the security of being debt-free, while the other could lead to higher long-term growth.
That’s the debate listener Elena brought to Suze Orman‘s “Women & Money” podcast. At 39, married, and raising a two-year-old, she and her husband found themselves divided over how to handle their limited extra funds. She wanted to put a little more toward their mortgage principal each month, while he wanted to invest in the stock market instead.
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Elena explained that they owe about $415,000 on a 30-year fixed-rate mortgage at 3%, scheduled to end in 2051. With childcare costs taking up much of their budget, they could only afford to pay an extra $100 or $200 per month — enough to shorten their loan by two or three years.
Her husband, however, argued that investing that money could yield higher returns than the 3% interest rate they’re paying on the loan. Elena admitted that her desire to pay it off sooner wasn’t purely financial. “I have friends who paid off their homes early,” she said, “and it makes me second-guess our path.”
Orman immediately sensed there was disagreement in the household. “When somebody’s asking me a very simple question, it’s usually because somebody else doesn’t agree with them,” she said.
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Her verdict? Elena should listen to her husband on this one.
“You’re only 39,” Orman pointed out. “You have a 2-year-old, I doubt highly that may be your only child. What if all of a sudden you have another child and then another child? You really could, and that house is too small now or doesn’t meet your needs, and you want to move.”
She added that a home’s financial value comes from appreciation, not from how quickly you pay it off. “It’s not about the 3% in the mortgage that you want to get rid of,” Orman said. “You make money in a home by it appreciating over the years.”
