Should I Pay Off My Mortgage Early?

There’s no one-size-fits-all answer.

Paying off your mortgage early can save you thousands in interest and give you peace of mind. But it can also mean tying up a lot of cash in your home instead of keeping it flexible for emergencies, investing, or other goals.

A good way to think about it:

“Can I afford to be less liquid, and is my mortgage rate actually high compared to what I could earn elsewhere?”

How KOHO Everything Can Help You Decide (and Save)

Whether you choose to pay off your mortgage early or not, you need a smart place to keep your short-term and medium-term cash while you decide.

With the KOHO Everything plan, you can:

• Grow your savings with 3.5% interest, one of the highest rates in Canada

• Earn a 2% cash back rate on groceries, eating, drinking, and transportation and 0.5% cash back on everything else

• There are no foreign exchange fees, so you save on international purchases and travel

• Unlimited transactions and free e-transfers

• No minimum balance required, ever

When Paying Off Your Mortgage Early Can Make Sense

It’s more likely a good idea if:

• Your mortgage rate is relatively high

• You’ve already built a solid emergency fund

• You don’t have higher-interest debt (like credit cards or personal loans)

• You like the psychological win of being debt-free, even if it’s not perfectly optimized on paper

Every extra dollar you put on your mortgage is a risk-free return equal to your mortgage rate (after tax considerations).

When You Might Not Want to Rush It

It may be better to prioritize other things if:

• You don’t have an emergency fund yet

• You’re carrying high interest debt (credit cards, payday loans, etc.)

• You’re not contributing enough to tax advantaged accounts (like RRSPs/TFSAs)

• You feel “house rich, cash poor” and would be stressed with less money on hand

In those cases, a more balanced approach often works better:
pay your mortgage as scheduled, boost savings and investments, and then add extra payments when your cash situation is stronger.