Paying off a mortgage with a negative real interest rate is a suboptimal financial move. However, that’s exactly what I did in this unusually high inflationary environment. Bad move? Maybe.

The mortgage rate was a 30-year fixed at 4.25% and the latest inflation figure was 9.1%. Therefore, it had a negative real mortgage rate of 4.85% (4.25% – 9.1%). I had the mortgage for 15 years until it was recently paid off.

In general, you want to keep your mortgage with a negative real interest rate for as long as possible because inflation is paying down your mortgage for you. However, sometimes, not every financial decision is about maximizing returns.

If you find yourself wondering whether you should also pay down your mortgage balance with a negative real interest rate, let me share with you the reasons why I did.

Why You May Want To

Keep reading this article on Financial Samurai.

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