I have a mortgage that 10years fixed at 2.75%. the remaining balance is about 70k and the monthly repayments are $1135. I got it it in 2015 and I'll pay it off by 2025. I have about $45k in savings and could save the $25k within a year. My savings account is a money market and I don't make that much on interest.

Not sure if I should look to pay off the mortgage, make overpayments each month or just continue to put my money in my savings account?

Thanks for any advice

****Update*** I have a couple of savings account. Main account: 45k dividend rate is 0.45% and apy is 0.45% (not sure what these mean) Other savings account: $7k And I'm paying into a work 401k

On average I save 2.5-3k a month from my paycheck which gets paid into my main savings account. Don't have any other loans or other debt to pay.

  • 1
    Are you investing for retirement yet?
    – Ben Miller
    Commented Nov 11, 2017 at 13:08
  • 1
    Related: Oversimplify it for me: the correct order of investing
    – Ben Miller
    Commented Nov 11, 2017 at 13:11
  • 2
    Is that $45K all your savings? or do you have another pot of money for emergencies and other events? Commented Nov 11, 2017 at 14:29
  • How much not "that much on interest"? Online bank accounts pay around 1.2% and CD rates around 1.5%.
    – RonJohn
    Commented Nov 11, 2017 at 14:32
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    Yes. Ben's link. The question is fair, and familiar. But the answer goes off in 10 directions unless we have more details. A lot more details. Commented Nov 12, 2017 at 13:19

2 Answers 2


There are a lot of open questions about if this is your only accessible money or if you have other emergency funds, and if you have any retirements savings and when do you plan to retire, but leaving this all aside:

You currently pay 2.65% on the mortgage, and you make less on savings (maybe 1 or 1.5%). So putting the savings into the mortgage makes you the difference, which is a good deal.
However, you need to reflect this with your risk-averisty, and your long term goals, and look at potential even better deals.

For example, you could put the savings into higher risk/higher gain investments (let’s assume index funds), and make 6 - 10% per year in average. That obviously is a lot more.
Why would you not want to do that? Investing like this is a long term plan. If this is your only savings/emergency fund, or if you need the money within the next five years, you should not do it; it could catch you in a bad market situation, and then it might be a severe loss. If you are sure you don’t need it for at least five if not ten years, invest it and keep the mortgage, you will easily beat its interest rate. If you are risk-averse, and can’t sleep with your savings doing loopings while you watch, that is also not a plan for you.

There are many things to consider, and your personal situation is relevant for the decision. Consider all options, and be sure to always have a emergency fund remaining. It is also not black and white - there are options in between of your two propositions - pay some in, and keep some for emergencies.

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    "risk-averisty" *risk-aversion Commented Nov 13, 2017 at 21:43

If it were me, I'd pour my entire savings into paying down the mortgage. I'd also get a HELOC and a personal LOC to use as my emergency fund if I didn't have one already. I personally don't like paying interest on loans when I have cash in the bank to cover it.

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    Me, I'd use that extra money to deposit to my 100% matched 401(k). But, since OP has shared no details, tough to say. Commented Nov 12, 2017 at 21:51
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    @JoeTaxpayer - heh, yeah. I was comparing only the two options given. I think HSA, Roth IRA, and 401k would all be higher priority, then pay down the mortgage.
    – TTT
    Commented Nov 13, 2017 at 15:56
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    Sorry. I was being obnoxious. Your answer is fine, the question is too broad in my opinion, but you answer is as focused as one can be with what we know. Commented Nov 13, 2017 at 22:48

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