Despite the wonderful peace of mind that comes with owning a home free and clear, deciding to pay off a low-interest rate mortgage early is not always straightforward. If your mortgage rate is low compared to risk-free investment returns, keeping the mortgage and investing excess cash elsewhere often makes more financial sense.

What Is Considered a Low-Interest Rate Mortgage?

I define a low-interest rate mortgage as one where the rate is at or below the risk-free rate of return. The risk-free rate can be equivalent to a Treasury bill or bond of your choice, or even the current money market rate you can earn on your cash.

For example, if your mortgage rate is 4% while money market accounts are offering 4.2%, then your mortgage qualifies as low-interest. Conversely, if you have a 2.5% mortgage but 10-year Treasury bonds are yielding only 0.6%, that mortgage isn’t truly low-interest because alternative risk-free investments aren’t offering better returns. Additionally, if inflation is running at 7% while your mortgage rate is 5%, you effectively have a negative real mortgage rate, making your debt cheaper over time.

When evaluating whether to pay off your mortgage early, you must always consider the opportunity cost of investing that money elsewhere. Finance decisions should never be made in a vacuum.

The 10-year Treasury bond yield, in my opinion, is the most important financial figure to track because it serves as a benchmark for financial relativity. With this perspective in mind, let’s go over the only good reasons to pay off a low-interest rate mortgage early.

The Only Good Reasons to Pay Off a Low-Interest Rate Mortgage

I’ve paid off several low-interest rate mortgages since I started buying real estate in 2003. Here are the few legitimate reasons I’ve found for doing so.

1) You No Longer Want to Own Your Home or Investment Property

The simplest way to pay off a mortgage is by selling the property. If your home’s value exceeds the loan balance, the mortgage gets paid off automatically in the transaction. There’s no need to aggressively save to pay it down early over many years. The main challenge is going through the selling process, which can take 30–45 days on average.

There are many reasons you might want to sell: relocating for work, retiring, downsizing, upsizing, or simply wanting less responsibility.

For example, in 2017, after my son was born, I no longer wanted to be a landlord for a four-bedroom house that had turned into a party home. With four or five young guys living there, my neighbors occasionally complained about noise and reckless behavior. So, I sold the property and eliminated my 4.25% mortgage. I then reinvested the home sale proceeds into stocks, municipal bonds, and private real estate in roughly equal proportions.

The relief of no longer managing that rental alone was worth not making any additional returns from the proceeds. Fortunately, the stock and private real estate markets continued to appreciate, making it a win-win situation.

2) You Have a Specific and Better Use for Your Home Equity

Money is most powerful when it has a defined purpose. Setting clear goals for your savings and investments makes financial decisions easier and more disciplined.

As you pay down your mortgage and home values rise, your equity grows. While many homeowners sit on their equity for decades, some may find better uses for it.

Here are some valid reasons to use home equity elsewhere:

• Rotating capital into a better investment – If real estate has outperformed for years and another asset class (like stocks or bonds) looks more attractive, you might decide to cash out and diversify. Conversely, if your home has appreciated significantly, but residential commercial real estate has not, you could rotate into the underperformer.
• Paying for college tuition – If you purchased a rental property when your child was born, you could sell or refinance it to help fund their education 18 years later.
• Funding your retirement – Many retirees downsize and cash out equity to simplify their finances and reduce costs.

Using home equity strategically can unlock new financial opportunities, as long as the alternative investment or use of funds is well thought out.

3) Your Real Estate Exposure Has Grown Too Large

Everyone should have a target asset allocation for real estate relative to their total net worth. If property values surge, you may find yourself overexposed to real estate, prompting a need to rebalance.

Some common scenarios where this happens include:

• A prolonged real estate bull market increases your property’s value disproportionately.
• You buy a new dream home before selling your old one, temporarily holding more real estate than planned.
• A stock market crash reduces your non-real estate assets, making real estate a larger percentage of your portfolio.
• You inherit a property unexpectedly, further increasing your real estate exposure.

If your target real estate allocation is 50% of net worth, try to keep it between 40% and 60%. Anything outside that range may justify selling a property and reallocating funds.

4) You Are Fed Up with Local Government And Property Taxes

As property values rise, so do property taxes. At some point, you may feel that your tax burden is excessive, especially if you believe local government mismanages funds or fails to address key issues.

While property taxes fund essential services like schools and public safety, government inefficiencies and corruption can erode trust. Some homeowners reach a breaking point and decide to sell rather than continue funding a government they don’t support.

The Most I’m Willing to Pay in Property Taxes

For me, the maximum amount I’m willing to pay in property taxes is $100,000 a year. Property taxes fund public schools, emergency services, and infrastructure—things I fully support. But beyond that threshold, my willingness to pay more depends entirely on how well my city government actually serves its residents.

If the new mayor steps up—tackling corruption, cracking down on drug dealers and violent criminals, and cleaning up the streets—I’d consider paying more. But if the status quo remains—wasteful spending, ineffective policies—then I’d rather put my money elsewhere.

The Frustration of Paying Huge Taxes for Broken Governance

Imagine this: You’ve paid over $1 million in property taxes over the past 20 years. You take pride in maintaining your home and community. Then, one day, a San Francisco city official slaps a notice on your door saying your planter boxes—on your own property—are too high. They give you 30 days to remove them or face a $3,000 fine, plus an additional $100 per day for noncompliance.

Meanwhile, rampant drug use leads to overdoses in broad daylight. Retail theft is so bad that major stores are closing their doors. Homeless encampments grow while city officials dither. And yet, instead of addressing these real issues, the government focuses on policing planter boxes.

Paying property taxes is one thing. Watching that money get squandered while the city deteriorates is another.

5) Your Adjustable-Rate Mortgage (ARM) Is Resetting to a Higher Rate

If you have an adjustable-rate mortgage (ARM), you might face a sharp increase in your mortgage rate once the fixed period ends.

For example, suppose you took out a 7/1 ARM at 2.5%, and now, after seven years, it’s resetting to 4.5%. Over those years, you’ve built equity and increased your savings. Instead of letting the rate adjust, you could pay off the mortgage or pay down a large portion and recast the loan for lower payments.

If you choose not to refinance your ARM and stick with it, your interest rate could eventually reach its maximum allowable limit—potentially higher than you’re comfortable with. For example, by the ninth year, a 4.5% rate could jump to 6.5%, and by the tenth year, it might rise to 7.5%. In a scenario where the 10-year Treasury bond yield remains below 4.5%, paying off the mortgage could be the smarter financial move.

6) You’ve Achieved Financial Freedom And Prefer Simplicity Over Profit Maximization

Once you’ve achieved financial independence, you may prioritize peace of mind over higher returns. Instead of chasing stock market gains, you might prefer the certainty of owning your home outright.

If you have enough wealth to comfortably fund your lifestyle with passive income, paying off your mortgage can be a rational decision. Even if stocks or private investments offer higher returns, the mental and emotional benefits of being debt-free may outweigh the financial upside of keeping a mortgage.

For many, financial freedom means shifting focus from capital accumulation to capital preservation and lifestyle enjoyment. After all, the first rule of financial independence is to not lose money.

Use Mortgage Debt to Your Advantage Until You No Longer Need It

In my 20s and 30s, I embraced mortgage debt to grow my wealth. I refinanced whenever possible, leveraging low rates to invest elsewhere. I had no choice but to make my money work harder since I didn’t have much to begin with.

Now, in my late 40s, my perspective has shifted. I’m focused on simplification. As my last remaining mortgage nears its reset period in 2026, I plan to pay it off.

Ultimately, everyone’s goal should be to become mortgage-free by the time they no longer want to or can work. When that day comes, the peace of mind from owning your home outright will far outweigh any financial argument for keeping a mortgage.

Because in the end, peace of mind is priceless.

Readers, what are some other compelling reasons for paying off a low-interest-rate mortgage that I haven’t mentioned? Have you ever regretted paying off a low-interest mortgage? If so, what was your biggest regret?

Invest In Real Estate Passively To Grow Your Wealth

Invest in real estate without the burden of a mortgage, tenants, or maintenance with Fundrise. With almost $3 billion in assets under management and 350,000+ investors, Fundrise specializes in residential and industrial real estate. During times of turmoil, real estate tends to outperform. 

I’ve personally invested $300,000 with Fundrise to generate more passive income. The investment minimum is only $10, so it’s easy for anybody to dollar-cost average in and build exposure. Fundrise is a long-time sponsor of FS. 

The Only Good Reasons To Pay Off A Low-Interest-Rate Mortgage is a Financial Samurai original post. All rights reserved. Financial Samurai began in 2009 and is the leading independently-owned personal finance site today.Everything is written based off firsthand experience and knowledge. Sign up for my free weekly newsletter here.

Every day, there seems to be AI news: a new model, a promising startup, an NVIDIA chip reveal.

Now, a new report by Writer, a generative AI platform, and independent research firm Workplace Intelligence, examines how the AI race is affecting companies — and apparently, it’s creating a big rift between IT teams, executives, and employees.

The 2025 AI Survey: Generative AI Adoption in the Enterprise report surveyed 1,600 workers (800 C-suite executives and 800 employees) in various sectors (technology, financial services, retail and consumer goods, healthcare, pharmaceuticals, and life sciences) across the U.S. and found that almost 72% of the companies are investing at least $1 million each year in generative AI technology.

Related: ‘Not Necessarily Super Excited About This’: Klarna’s CEO Says AI Can Take Over All Jobs, Including His Own

However, despite the spending, only one-third of executives reported seeing a significant return on investment.

Meanwhile, two out of three executives surveyed said generative AI adoption has led to division between teams, while almost half (42%) reported that adopting AI “is tearing their company apart.”

“Generative AI holds transformative potential for the enterprise, but it can also create deep rifts within organizations that rely on a patchwork of point solutions or IT-built applications developed in a silo,” said May Habib, CEO and co-founder at Writer, in a statement.

Still, the survey also found that a majority of employees (at least 9 out of 10) were optimistic about their company’s approach to generative AI — and they’re even paying for it on their own. More than one-third of employees (35%) said they pay out-of-pocket for AI tools.

Related: No Meetings, Up to $30 Per Hour, Fully Remote: A College Student Training AI Says the Work Is ‘Perfect’ for Introverts

The majority of employees surveyed (81%) and almost all of the C-suite (97%) said if they were looking for a new position, finding a company that uses generative AI is important.

“The companies who will lead in the next era of AI adoption are the ones putting the right processes and systems in place today,” said Dan Schawbel, managing partner, at Workplace Intelligence. “They’re prioritizing their change management efforts, cultivating support for AI among their people, and ensuring they’re making the right investment in AI tools.”

To combat the divisions, Habib suggests adopting a clear, organization-wide approach to AI in the workplace and also choosing a vendor that can provide training to show the best use cases (and embolden employees to use it).

View the full report, here.

Related: The CEO of $61 Billion Anthropic Says AI Will Take Over a Crucial Part of Software Engineers’ Jobs Within a Year

Click Profit promised investors that it would build e-commerce stores on Amazon, Walmart, and TikTok and help them earn tens of thousands of dollars in passive income. All the client had to do was pay between $45,000 and $75,000 initially as a management fee, and then $10,000 more for inventory.

Now the Federal Trade Commission (FTC) is suing the company, alleging that consumers collectively lost at least $14 million by participating in the so-called investment opportunity.

On Tuesday, the FTC filed a lawsuit against Click Profit and its owners, Craig Emslie and Patrick McGeoghean, alleging that the company promised customers $150,000 in “guaranteed” sales by helping them sell brand-name products selected by its AI supercomputer. Click Profit said it would also handle all the logistics, product selection, shipping, and customer service. Investors would make money if products were sold, but Click Profit would receive a 25% to 35% cut.

However, the majority of investors found that the promised money never materialized. The agency requested that a federal court stop Click Profit from operating, and the request was granted earlier this month.

“Click Profit misled consumers by falsely promising them guaranteed passive income using cutting-edge AI technology and exclusive brand partnerships,” said Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, in a statement. “Their deception caused individual consumers to lose tens of thousands of dollars while the Click Profit’s operators enriched themselves.”

The case is the latest in the FTC’s crusade against “automation” companies that claim to launch and manage online businesses for clients in exchange for a hefty investment. The FTC sued Ascend Ecom in September 2024, and Empire in August 2023, over similar claims.

Related: The FTC Says a Major Ratings Website Published ‘Fake’ Reviews — Here’s How to Avoid It Happening to Your Business

What Are the Allegations Against Click Profit?

Per the complaint, Click Profit has been operating as a business since at least 2021 under different names like Automation Industries and PortfolioLaunch. The company marketed its “scheme” as a “passive income” generator powered by AI with profits that “will outperform returns on traditional investments, like stocks and real estate.”

Click Profit built credibility in advertisements, marketing materials, and sales pitches by claiming to have forged partnerships with companies like Disney, Colgate, and Nike that enabled the company to purchase prime merchandise in bulk at a discounted price. According to the FTC complaint, Click Profit does not have any affiliation with these companies, and the products the company sold on its e-commerce storefronts consisted of generic and off-brand goods like paper clips, food storage bags, and drying racks.

In advertisements, Click Profit also told customers that it spent $5 million on a supercomputer that used AI to find the “most profitable products.” The FTC wrote in its complaint that “the highly touted AI technology and brand partnerships do not exist, and the promised earnings never materialize.”

Related: Don’t Copy Big Brands to Increase Your Sales on Amazon — Do This Instead

Amazon suspended or blocked about 95% of the stores Click Profit set up for violating its seller policies, per the complaint. After taking Amazon’s fees into account, more than 20% of Click Profit’s stores on Amazon earned no money at all while about 33% earned less than $2,500 in lifetime sales — not enough to recoup the at least $55,000 investment.

Customers were left with “burdensome credit card debt and unsold products,” per the FTC.

Now the agency is asking for monetary relief for Click Profit’s clients as well as a permanent barring of the company from doing business.