My mortgage went through the roof since the increase in interest. I am considering selling my stocks that I have had for decades. My question is, the total value of the stocks is just under the value of the mortgage, but if I sell the stocks, I would have to pay taxes. Is there any strategy that would allow me to sell the stocks to pay of the mortgage without losing 25% of the gains that it increased over the years?

In the past I have asked questions that were related to how to avoid taxes and they somehow didn't go over well with those on the list. It's not a matter of not paying taxes, I need to come up with a way to stop the mortgage which is burning most of my paycheck and it's 75% interest, only 25% is actually paying down the mortgage.

  • 2
    Are you in the US?
    – Stan H
    Jun 8 at 19:57
  • I and the property is not in the U.S but the stocks are
    – Mr Monee
    Jun 8 at 19:58
  • 1
    are the stocks in a retirement account? If so what type? Are you above retirement age? or are they in a taxable account? Jun 8 at 19:59
  • The stock are in a regular taxable account. Can a roth ira help if one is below 60?
    – Mr Monee
    Jun 8 at 20:04
  • 1
    You should add a country tag since tax laws differ from place to place
    – littleadv
    Jun 8 at 20:11

2 Answers 2


If you are a US taxpayer and the stocks are held in a regular after-tax brokerage account, you'll owe capital gains taxes on the appreciation when you sell. You can't avoid paying capital gains taxes by using the gains to pay down your mortgage.

You could get a stock-secured loan against your stocks without incurring any taxes. It is unlikely that you'd get a lower interest rate on a stock-secured loan vs a mortgage in the US. But if the property is outside the US and denominated in something other than dollars, your mortgage interest rate could be higher than a stock-secured loan. Of course, most lenders aren't going to lend 100% of the value of the asset. And you'll have to make monthly payments on this new loan.

  1. With the exception of certain kinds of retirement accounts, investment gains are taxable. In other words, if you buy $100,000 worth of stock and sell it for $120,000, you owe taxes on the $20000 gains, not on the original $100000.

  2. In 2023, individual filers won't pay any capital gains tax if their total US taxable income is $44,625 or less, so if it was just that $20000 profit you wouldn't owe any taxes. In the next bracket, up to just short of a half million dollars, the rate is 15%. If your income is above $492,300, capital gains are taxed at 20%. So worst case, the taxes you would owe would be 1/5th of your gains, not 1/4 of the total.

  3. Starting a loan with most of the payment being interest is entirely normal; that's how the amortization formula works out when you want to make equal payments over the life of the loan. See other answers about how loan amortization works. So the fact that 75% of your loan payment is interest is not something to panic about; that percentage will drop over the course of the loan until the last few payments are almost entirely principal. It does NOT mean you are paying more on the loan than the interest rate you signed up for.

  4. Deciding whether to use investments to pay off a loan is a matter of comparing the interest rate of the loan against the rate of growth (after fees and taxes) you are confident you can get from the investments. If you believe that your investments are very likely to grow at 8%, and your loan is charging you 6%, you may want to leave some or all of the money in the investments; this is essentially a form of leveraged investment. If the numbers are the other way around, it may indeed make sense to use the investments to pay off some or all of the loan. That's a decision you need to make based on your own finances and risk tolerance and confidence in the market.

In my case, my original mortgage was at 6.5%, and 8% is considered "typical market rate of return". I could have sold off the investments and paid cash for the house instead. Or I could have borrowed the entire thing. Instead, I was most comfortable with a compromise between the two options, cashing out about half my investments to pay about half the value of the house, and taking a mortgage for the rest. Whether that strategy will make sense for you or not is something you need to determine for yourself.

EDIT: I should have mentioned that the other obvious way to reduce the cost of the loan is to see if you can refinance at a lower rate. As I said, I bought the house using a 6% loan. I refinanced it twice, taking new loans at lower rates to fully pay off the previous loan, and because the economy was being weird in the right direction I was able to negotiate that down to 3.25%. There are some fees associated with refinancing, but rule of thumb is that if the loan has a while to go and you can reduce the rate by a full percentage point or more, it's worth doing. You aren't necessarily stuck with your initial mortgage forever, at least not in the economic systems I'm familiar with.

  • 1
    OP said "since the increase in interest", which makes me think they had an ARM on which the interest rate just increased, increasing the amount of interest for every payment (compared to the pre-adjustment schedule).
    – chepner
    Jun 23 at 13:30
  • So run the numbers based on what it costs now.
    – keshlam
    Jun 23 at 13:31
  • I was just commenting on your point #3. The 75/25 split might be a new result of a rate adjustment, higher than what the OP had been accustomed to. I think the idea of paying more interest now per payment is just the motivation for wanting to pay down the mortgage faster.
    – chepner
    Jun 23 at 13:36
  • Added a comment that if interest is high there might be an opportunity to refinance even in current conditions... And if not, there may be one later.
    – keshlam
    Jun 29 at 2:19

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