Risk is not a factor in the question.

what are u guys even arguing about lol, risk is a factor but not used for return calculations like netflix said, but netflix also didn't account for scenarios (albeit unlikely in modern times, but not mathematically impossible) where interest rates are in the high teens because paying off your mortgage early then would actually be better than the average joe's investment returns

No. In the statement given by the other user "Pay off the mortgage then you have an insane amount of money to invest." risk was not at all a factor if you take the statement as is.


Also risk is absolutely used for return calculations when you're talking about expected return which is exactly what you're considering when determining if you should pay down a mortgage or invest. On the most basic levels you should always be calculating the difference between risk free return, and the risk premium multipled by your beta. Depending on your investment of choice obviously the risk premium and beta will be vastly different. A total market ETF vs a mining sector ETF. Risk and returns are 100% tied and used when calculating expected returns.

This post was edited by SBD on May 17 2022 11:10am

you're talking about risk-adjusted returns and the sharpe ratio also the guy originally said what you quoted but then his last two response has been "you are missing risk from your equation" so he's contradicting himself, but I was just pointing out that paying off the mortgage early isn't mathematically impossible to give you better returns

What im looking at in this is the risk factor.

When you do the math that is based off everything going exactly how you think it will go.....how often does that scenario work out for you? More times than not things do not go exactly as planned. If you pay down your mortgage then 6 years down the road lose your job or a recession comes or.....covid? Then you will already have a paid off house and be in a much better situation than someone who doe snot pay down the mortgage and instead just invests their money for a few % points.

I am more along this line of thinking.. Why on earth would I pay off a 2.3% interest mortgage loan early? I can make more money by investing and letting the mortgage ride. Inflation does it work and the value of my investments go up. It’s a win-win and a no-brainer.

That's fine, but when it comes to "amount of money to invest" risk is not a factor in that question. You can argue that it's a better idea to pay down mortgage, but that will always result in less money to invest.

You specifically said that paying off the mortgage will result in more money to invest. That is mathematically impossible.



My mortgage is a fixed 3.5% 30 year.

I will never make an extra payment. Especially in a high inflation environment.

This post was edited by NetflixAdaptationWidow on May 24 2022 07:18am

At the point I lose my job, my investments will pay for my mortgage.. All it takes is a couple rental houses and your mortgage is paid for by others.

Respectfully disagree with both of you. Risk has to be in the equation. You have no clue what is going to happen in the next 30 years that could easily have you lose everything if your home i snot paid off.

If you picked up a property at ~3.5% fixed interest with no PMI, then it is silly to pay it down early unless you've got all your other financial goals secure and a healthy emergency fund.

Better to do minimum payments on mortgage, bolster your emergency fund beyond the minimums, match employer contribution on 401k, do a side retirement like IRA, then pay it down if you don't want to dabble with a brokerage account.


I'm not rich or poor, but my house is 30% paid off, 3.5% interest rate on 120k. I could easily pay it down faster, but why? Not interested in living like I'm back in the trailer court to pay down something artificially priced.