If you’re nearing your retirement, you might catch yourself wondering if it’s better to own your home free and clear with no monthly payments or if it might be better to use your accumulated savings for other purposes, like investing or keeping it for emergencies. Whatever your choice is, the main aim should be to stay debt free and stress-free.

To enter retirement free of debt and free of worries is the primary goal, but it might not be achievable for everyone.

Lower interests
The interest rates on mortgage debts are very low compared to the interest rates on credit card debts or other types of loans. Although the ideal situation would be for you to enter your retirement years debt-free, if at all you end up entering with a debt, make sure it is a mortgage debt. This is because it has low-interest rates compared to other types of debts, which you will be able to pay off as soon as possible.

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Investments pay off
If you have no worries of completing your mortgage payments after retirement, you can use some money to invest regularly in the stock market or other investment programs. This will help you reap the benefits of higher returns, which you can use to pay the mortgage later.

Do this only if you can afford to. If the cash flow seems to be worrisome after retirement, the best thing to do is to try and pay your mortgage before you enter retirement.

Owning a home is better than renting
If you plan to sell your home, pay off your mortgage, and downsize into an apartment—drop that plan, and stick to your mortgage.

Firstly, your rate of your mortgage stays constant until you pay it off, while rent changes with time, typically in ascending order.

Secondly, you are certain about the payment on a mortgage and you have your own home where you live in comfort, no matter what. Renting, on the other hand, gives you no certainty about a constant payment and neither does it guarantee a comfortable life.

Benefits of tax deductions
When you pay for a mortgage, you are eligible for tax deductions every year. Although the tax deductions will decrease, if you pay your mortgage off entirely, you will get no tax deductions thereafter. With a mortgage, you have the guarantee of paying lesser interest with each monthly payment of your mortgage.

Keep your dream home
If you can afford the payments after retirement, why even think of selling your home? If you love your home because it is your very own, located in the ideal neighborhood, and you have precious memories attached to it, you might not want to sell it, and you should not. What if selling your home isn’t enough for your finances? So, if you can afford it, you should keep the mortgage and the house that you love.

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