The cheapest form of debt you will incur
Mortgage loans are probably the cheapest form of debt you will incur. Before you even look there, you should consider any other debts you might have – a bank overdraft, an outstanding accumulated credit card bill, a personal loan taken out for any other purpose with a bank or credit union. On each of these, you will be paying far more interest than on your mortgage. Pay them off first.
Now we are moving into the interesting territory. Let’s say you started saving through the famous SSIA scheme introduced by Charlie McCreevy. You continued to save to this day and now you have a nice lump sum.
Do you keep it going for a rainy day, do you use it to reduce, or even clear you mortgage?
The bottom line is this: If you pay off your mortgage before you retire – you will be living in ‘free accommodation’ for years ahead.