If you locked in a 2-5% mortgage rate, paying it off early costs you money. Passive real estate funds average 10% returns, so investing extra cash beats prepaying a low-interest loan.
Around 2% to 5%.
About 10%.
3%.
Here's why you should never pay off your house if you're a millennial. Millennials have been buying homes at historically low interest rates around 2 to 5%. However, on average, you will make 10% returns by putting your money in a passive real estate fund. So instead of paying off a 3% loan with your extra money, invest that money into funds and syndications to get 10%. This is a classic example of opportunity cost. And if you want to learn more simple money strategies, be sure to follow for more.
Physicians and High Earners — What Real Estate Can and Can't Do for Your Taxes
