When it comes to paying off your home mortgage, you have probably been told that the earlier you can pay it off the better. However, according to a recent Equifax blog post, “With Today’s Low Interest Rates, Should I Pay Off My Mortgage Early?” this advice might not be the best choice anymore for all homebuyers. With home mortgage interest rates at a historic low right now, paying off your mortgage early might not be the best decision for you.

Depending on your personal financial condition, your lifestyle and how you manage your money, there are pros and cons to paying off your mortgage early. Here are three circumstances discussed in the Equifax blog that explain why it may not be best to pay off your mortgage early.

Can you better invest that money elsewhere?

Consider the economic opportunity cost, or the loss of a potential gain when you choose one alternative over another. For instance, if you want to pay off your 30 year, $200,000 mortgage early and decide to prepay an additional $300 per month, this would allow you to pay off your mortgage 11 years earlier and save you close to $50,000 in interest. Then consider what would happen if you invested that same $300 a month over a 10 year period, $36,000 in total, into something else. Could your profit be more than what you spent paying off your mortgage?

You could lose some of the value of your mortgage interest deduction.

If you decide to prepay your mortgage, you accelerate your interest payments and compress more interest into fewer years. The way mortgage payments are designed, they make you pay most of the interest in the first few years anyway. Because most states and the IRS allow you to deduct the annual cost of the mortgage interest you pay, when you pay off your mortgage early, you basically throw away a 30-year long tax break.

If you know you will move from your home.

The average American family doesn’t pay down a home mortgage for 30 years. According to the National Association of Realtors Profile of Home Buyers and Sellers, in 2014 the typical buyer lived in their home for an average of 10 years, which they say is up from six years on average in 2007. Homeowners typically sell one home and buy another using the money they made from the sale to pay off their existing mortgage and put a down payment on the next. So, even if you have been making accelerated payments for the past 10 years and then decide to move, you will still owe most of the principal and considerable interest at that point. In the end, you may find that the appreciated value of the home is more valuable than the amount of interest you saved by making accelerated payments on your mortgage.

On the other hand, if you find the house of your dreams and plan to stay there for at least the next 30 years, prepayments on your fixed-rate mortgage may help you reduce the amount of interest you have to pay over the life of your loan. It really depends on your situation and spending habits whether paying off your mortgage early is the best option for you.

For more information on the pros and cons of paying off your mortgage early, read the full article on the Equifax Personal Finance Blog.

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