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Will only have the house for two years then will transfer due to job. So want to know if it is better to pay the monthly amount to mortgage company and invest the money; or pay off the mortgage in full.

7 Thoughts on Should I pay off a second mortgage of 14000 @ 9% (only have house for 2 yrs) or put $ in bank @3.5% interest?
  1. emucompboy
    February 10, 2014 at 12:55 pm

    Pay off mortgage.

    More advice: Make sure that you have had the house at least two years before you sell it, so you can get the capital gains exemption!

  2. KL
    February 10, 2014 at 1:41 pm

    By paying it off, you will save $ 2,520 in two years on the interest you would have paid towards the loan. If you don’t pay it off and put the money in the bank you will only gain $ 980 in interest in two years.

    Pay it off.

  3. Tapestry6
    February 10, 2014 at 1:45 pm

    Pay off the mortgage and good grief find a money market account not the savings account in the bank.. even Paypal give 5.3% interest!!

  4. InspectorBudget
    February 10, 2014 at 1:58 pm

    Pay off your mortgage. That is equivalent to investing your money in a 9% reutrn situation.

    ( even though the interest is tax deductible, and bank interest is taxable, you still come off way better by paying off the mortgage. )

  5. markos m
    February 10, 2014 at 2:47 pm

    RUSH AND PAY IT OFF! Because most of the payment that you are paying is interest.

  6. kerry77
    February 10, 2014 at 2:50 pm

    Definitely pay off the second mortgage at 9% first, instead of putting the money in the bank to earn a measly 3.5% interest rate. I would avoid putting money in a savings account or an interest-bearing checking account, in all instances. They’re nice to have, because you can get at the money if you need to, but the rate of return is pathetic. The bank is making a healthy profit on your savings by loaning it out at 9+% and only paying you 3.5%

    Another thing to consider is the tax implications of paying off your mortgage. If you itemize your deductions, you will lose the mortgage interest deduction. If you don’t itemize, then I wouldn’t think twice about paying off the mortgage.

  7. ramman
    February 10, 2014 at 3:34 pm

    That depends on your financial situation outside of what you are telling us.

    If you already have adequate savings to cover you for any unexpected disruptions, then, it might be best to pay off your mortgage.

    However, you should pay off any debt that you currently starting with the highest interest rate first. So, if you have credit card debt that has a higher interest rate, I would pay that before paying down the mortgage, even though you are going to sell in 2 years. Especially since the interest on your mortgage is tax deductible.

    Good luck!

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