Retiring In A Decade? 5 Reasons To Get A Short Mortgage Now

Are you planning to retire in ten to fifteen years? This is a time for a big final push toward building a comfortable and reliable retirement. And one key part of that could be obtaining a shorter 10 or 15-year mortgage. How can this strategy improve your retirement even though it calls for larger monthly payments? Here are a few of the most important ways. 

1. It's Paid Off at Retirement. Heading into retirement with a house payment is a big risk for many seniors. The house payment reduces your flexibility and ability to adjust for things like emergencies and even inflation on a fixed income. By timing your house payoff date with retirement, you give yourself more options. 

2. Equity Builds Faster. It's harder to make higher monthly payments, but it has an automatic good effect: your equity builds faster. Because you pay off more principal every month, the balance owed goes down more quickly than with longer mortgages. Combined with healthy appreciation, you could end up with an asset worth much more than you could have with other investments.

3. You Have a Retirement House. A paid-off home isn't just a financial relief. It also means you have a secure home to live in during retirement. Future retirees who currently pay rent will find a big boost in their retirement budget when they don't have to worry about rent or inflationary increases. Your home is yours for as long as you want it. 

4. You Have to Save. Most older workers know that they should ramp up retirement savings during the last decade or so. But it's harder to actually accomplish consistently. By locking in the higher monthly obligation of a short mortgage, you have to follow through on the repayment plan. And because the result is a fully paid-off property, this forces you to put money into this aspect of your retirement.

5. These Are High Earning Years. Statistically, you are likely in your highest earning years in this last decade or two of a career. Take advantage of this higher income by plowing more of it to securing your biggest retirement asset. Short mortgages aren't always an option for lower earners, so now is the time to use this tool that's finally available to you. 

Where to Learn More

Want to know more about mortgage loans of shorter-than-average length? Whether you're interested in a 10, 15, or 20-year loan, start by meeting with a mortgage lending service—such as Together Credit Union— today. With their expertise and guidance, you may find that this one move is a faster way to a better retirement.