I see where you're coming from, but honestly, focusing only on extra payments might not always be the best move for everyone. Sure, it feels good seeing that principal shrink a bit faster, but sometimes your cash can do more for you elsewhere. For instance, if your loan interest rate is pretty low—like those lucky folks who snagged sub-3% mortgages—then investing that extra $50 or $100 monthly into something like a retirement account or even an index fund could potentially earn you way more over the long haul.
And yeah, tracking progress is motivating (and oddly satisfying, I'll admit), but don't let obsessing over small incremental shifts distract you from bigger financial goals. I've had clients who got so caught up in paying down debt quickly they missed out on employer matches or tax advantages elsewhere... that's like leaving free money on the table. Just something to consider before doubling down too hard on extra payments.
"if your loan interest rate is pretty low—like those lucky folks who snagged sub-3% mortgages—then investing that extra $50 or $100 monthly into something like a retirement account or even an index fund could potentially earn you way more over the long haul."
This is exactly why I refinanced last year. My original mortgage was around 4.5%, and I felt stuck just chipping away at interest. After refinancing down to 2.75%, I shifted my extra payments into my IRA instead. Honestly, seeing that investment grow steadily feels way better than watching tiny dents in the principal...
Totally get where you're coming from. I was in the same boat a couple years back—had a mortgage hovering around 4.25% and every extra payment felt like it barely moved the needle. At first, I was dead-set on paying it off faster, but then a friend nudged me to rethink that strategy. After refinancing down to 2.8%, it was like a weight lifted off me. I started redirecting those little extra amounts into my index funds instead.
"Honestly, seeing that investment grow steadily feels way better than watching tiny dents in the principal..."
Exactly this. It’s weirdly motivating to see your money actually working for you, rather than just disappearing into interest payments. Plus, having that flexibility of knowing my investments are accessible if I absolutely needed them (without selling the house, obviously) gives me peace of mind. Still, sometimes I catch myself wondering if I should strike a balance—maybe throw a bit extra towards principal occasionally just for psychological satisfaction. Anyone else feel torn like that?
Completely agree with your point about flexibility. Investing the extra cash often yields better long-term returns than chipping away at a low-interest mortgage. Still, I’ve seen some clients benefit psychologically from occasional principal payments—finding that balance can really ease financial anxiety.
Totally get where you're coming from on the psychological side. Numbers-wise, investing usually wins out, but I've had moments myself where throwing a bit extra at the principal felt oddly satisfying. Had a property a few years back—interest-only loan—and even though I knew logically it was smarter to invest elsewhere, every now and then I'd toss in an extra payment just to feel like I was making progress. Sometimes peace of mind is worth more than squeezing out every last dollar...
