"Shark Tank" investor Kevin O'Leary has said the ideal age to be debt-free is 45, especially if you want to retire by age 60. Being debt-free — including paying off your mortgage — by your mid-40s puts you on the early path toward success, O'Leary argued.
There is no official age limit set by law. However, most mortgage lenders have an internal limit, in the sense that past the age of 75, it is tough to qualify for a mortgage, because of concerns that you may not repay the mortgage (ie you probably will not be alive in 30 years).
However, everyone's personal financial circumstances vary and you should focus on repaying your debt at your own pace. The average age for having your mortgage paid off in 2023, is anywhere from 50-64 years, with most managing it by 62*, so don't worry about racing others to any kind of finish line.
One of the most significant benefits of paying off your mortgage is the peace of mind that comes with owning your home outright. Without a mortgage, you don't have to worry about monthly payments, which can be especially comforting in retirement or during economic downturns.
On the one hand, you could have a higher net worth at the end of 30 years if you invest extra money instead of using cash for a house. However, not having a mortgage gives you freedom from mortgage debt.
Dave Ramsey, the renowned financial guru, has long been a proponent of financial discipline and savvy money management. This can include paying off your mortgage early, but only under specific financial circumstances.
Can a 70-year-old choose between a 15- and a 30-year mortgage? Absolutely. The Equal Credit Opportunity Act's protections extend to your mortgage term. Mortgage lenders can't deny you a specific loan term on the basis of age.
An unmortgaged home was once a retirement perk
Mark Iwry, nonresident senior fellow at the Brookings Institution. But that pattern is changing. In the Michigan study, researchers found that the share of retirement-age homeowners with mortgages rose from 38% to 51% in a generational span of about 25 years.
40% of Americans Pay Off Their House — Are They Doing Better Financially? For most Americans, a home mortgage is the biggest financial obligation they will ever have. A traditional mortgage spans 30 years and is often in the hundreds of thousands of dollars, so the interest charges can be enormous.
Key Takeaways: Most first-time homebuyers make a purchase when they are 35. Buying a house at a young age can mean building equity young and getting a home paid off sooner. Purchasing a house in your 20s or earlier can also mean you feel trapped, unable to move at a moment's notice.
If you pay off your house, you will feel an elevated level of happiness for maybe up to six months, but probably closer to one-to-three months. After that, you will simply take for granted you no longer have to pay a mortgage.
The Standard Route is what credit companies and lenders recommend. If this is the graduate's choice, he or she will be debt free around the age of 58. It will take a total of 36 years to complete. It's a whole lot of time but it's the standard for a lot of people.
Key Takeaways. Paying off a mortgage can be smart for retirees or those who are just about to retire if they're in a lower-income tax bracket. It can also benefit those who have a high-interest mortgage or who don't benefit from the mortgage interest tax deduction.
Being debt-free can mean less activity on your credit history and potentially even hurt your credit score. Higher mortgage rates: A major downside of going debt-free negatively impacts your credit score is that you might not get the best deals on things like mortgages.
Data collected by NASDAQ suggests that while only 28% of homeowners below retirement age have paid off their homes, nearly 63% of those 65+ have done so. These statistics highlight Americans' importance in entering retirement with freedom from what is usually their highest monthly fixed cost.
More people are retiring with debt than ever before. If you are assuming you will retire debt-free, then you better make paying off all debt (including your mortgage) a priority in your budgeting process.
Borrowers receiving Social Security benefits can use that income to qualify for a mortgage, including Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI). Lenders will evaluate your gross Social Security benefit because they use your gross income to qualify you for a loan.
It's a loan that allows homeowners aged 62+ to tap into some of their home equity for additional cash: Without having to sell the home. Without having to make monthly mortgage payments (keeping current with property taxes, insurance, and maintenance required)
All of this creates an atmosphere of risk around older borrowers. The upshot is that if you're over the age of 62, you're almost 30% more likely to get rejected for a standard mortgage.
When You're Nearing Retirement: Orman has consistently recommended that homeowners aim to have their mortgage paid off by the time they retire.
In fact, the average millionaire pays off their house in just 10.2 years. But even though you're dead set on ditching your mortgage ahead of schedule, you probably have one major question on your mind: How do I pay off my mortgage faster?
If you pay $100 extra each month towards principal, you can cut your loan term by more than 4.5 years and reduce the interest paid by more than $26,500. If you pay $200 extra a month towards principal, you can cut your loan term by more than 8 years and reduce the interest paid by more than $44,000.