Many dream of having a “mortgage clearing” party at some point in their life. 

Even as I write this, the very thought of making my last mortgage payment makes me jump for joy. As the largest financial commitment most people undertake, mortgage payments are a regular concern for Irish people everywhere. 

But, on the other hand, mortgage debt remains the cheapest money you can borrow.

Given today’s low interest rate environment, it might make sense to hold onto a mortgage, since the cost of money is relatively inexpensive, but for many people, paying off their mortgage has less to do with maths and more to do with peace of mind.

Here are 3 reasons why you shouldn’t pay off your mortgage early.

With most fixed-rate and variable-rate mortgages below 4.5%, it really doesn’t make much sense to make extra payments towards a low interest rate mortgage when you have high interest rate credit cards, overdrafts or student loans.

And that’s looking at credit in a vacuum.

University fees, paying for weddings, holidays, car payments. 

So paying off the mortgage makes sense only if you foresee no need to borrow (more expensive) money in the short to medium term.

As mentioned earlier, for many people, paying off their mortgage has less to do with numbers and figures and more to do with how well they sleep at night. 

However, there may be other ways to get that peace of mind without tying up your assets in a house. 

If you’re great at saving money, one of the best ways to do this is to take three to five years of mortgage payments and put them in a separate account.

Then directly debit your mortgage payment from it. 

You’ll now have the security of knowing your payment is set for at least a few years.

That being said, I understand that for many it’s not as simple as overpaying where possible… and that saving for the vast majority is a pipedream.

Even if we snap up a property at the average age of 34, and take out a 25-year mortgage, it only takes a little bit of life to get in the way and leave us repaying well into retirement.

If you believe at some point in the near future that you might want to sell your house and downsize, it might be a smart move to hold onto your cash instead of paying off the mortgage.  

First of all, on the odd chance the property market goes south, you’ll have more options (such as a short sale) when you have a mortgage versus owning the property free and clear. 

As we get older and our incomes improve, the inevitable danger is that our lifestyle and spending increase with it. 

Spending creep refers to the habit we have of increasing our spending to match (or sometimes exceed) any increases in income that come our way.

This affects everyone, regardless of income and can see people shrouded in debt right up to retirement. 

PayOffMortgage.ie was set up to help Irish people to take back control of their pension fund and use it to pay off some of their biggest life expenses.

Right now in Ireland there is more than €500million in unclaimed pension benefits and by transferring your old workplace pensions to a PRB, you can access 25% of it tax-free, from age 50.

Are you able to pay off your mortgage early with a lump sum cash injection? 

Could you swap to a lower interest rate mortgage? Is your pension eligible for early release?

Take the eligibility assessment below and see if you are eligible.

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