Time to Pay Off the Mortgage?

William Suplee |

We often get questions regarding whether or not a client should put more money into savings or more into paying their mortgage off sooner. This often becomes a discussion about how people feel about that personally. For some, the satisfaction of owning your home free and clear is one of the greatest goals they have. For others, paying the debt down doesn't really hold that much interest.

However, with the recent change in the tax laws that limits the SALT (state and local tax) deduction to $10,000, it is probably time to rethink whether or not you want to prepay your mortgage. For people who are limited in their deduction, it probably makes more sense now to pay down their mortgage than it had in the past. Since the amount of your deduction is capped and you still must pay income tax on dividends and interest as well the 3.8% net investment income tax some higher earning investors pay, it has become more attractive to pay off your mortgage.