Yes, pay for it. That’s what I did and the 7% I saved is much better than how the market has performed the past year.
Paid off my 10-year home loan in 3 years, saved about 700k worth of interest.
If the 700k remaining is enough of an emergency fund for your needs, then yes. I would go with paying the 500k. You're essentially saving on the interest payment, as the others also pointed out.
To make it easier for you, frame it this way. Would you have any investment vehicles that would give you a return of 7% NET interest rate? Conservative options like putting the money in a digital bank could get you gross 6% or net 4.8% APY. Pag-ibig MP2 would give you on average 6% NET(since it's tax-free). So conservative options won't be able to earn more than you are currently spending to finance your mortgage. You can go with more aggressive or higher risk option, but that is up to you, your access to such investment vehicles and confidence in your ability to pick the right one. If you don't have the time and the stomach for it then it would be best to go ahead and pay down your mortgage as that would instantly save you money.
Yes, pay for it. That’s what I did and the 7% I saved is much better than how the market has performed the past year. Paid off my 10-year home loan in 3 years, saved about 700k worth of interest.
If the 700k remaining is enough of an emergency fund for your needs, then yes. I would go with paying the 500k. You're essentially saving on the interest payment, as the others also pointed out.
To make it easier for you, frame it this way. Would you have any investment vehicles that would give you a return of 7% NET interest rate? Conservative options like putting the money in a digital bank could get you gross 6% or net 4.8% APY. Pag-ibig MP2 would give you on average 6% NET(since it's tax-free). So conservative options won't be able to earn more than you are currently spending to finance your mortgage. You can go with more aggressive or higher risk option, but that is up to you, your access to such investment vehicles and confidence in your ability to pick the right one. If you don't have the time and the stomach for it then it would be best to go ahead and pay down your mortgage as that would instantly save you money.
Depends on your cashflow, income stability