Good time to pay down/off mortgage?

[cs1992]

I have a CD which is about to mature in January and am thinking about using it to pay down my mortgage. I will have about $100k to apply to my mortgage balance of $148k (30 yr loan at 5.25%, 25 years to go). My wife and I are in our late 30s and we are financially very conservative. We have no other debts. Fortunately, we have stable jobs and budget our ourselves strictly.
We plan to stay in this house a long time and homes are actually selling in our area.

I am worried about this money doing very little in another CD while we continue to shell out about $600/mo in mortgage interest. If times were better (market wise), I'd invest in something with better returns. However, with things as they are, I can't stop thinking about paying off this debt to avoid paying all the interest over the next 25 years.

BTW, If I apply the money it will save us about $108k in mortgage interest.

[EconoMutt]

Do you have 6 months expenses in an Emergency Fund?

[disneysteve]

I would 2nd the EF question.

Beyond that, it depends what you would do with this money otherwise. If you would buy another CD, the loan pay down is the better choice. Even after the tax deduction, the true rate on the mortgage is higher than what you'll earn on a CD.

I'd want to know, though, how you are funding your retirement plans. Are you maxing out your 401k/403b plans? Are you maxing out your Roths (if eligible)?

[LuxLiving]

Do you have any other money in savings? Retirement funds? Emergency fund?

[Nodebt13]

What other debt ? no car loans?

Pay down the mortgage yes always,
get from your local bank a 0 closing cost line of credit. for the future.
just in case you need some money for any emergency.

check an amortization calculator in the web.
put the original loan see where you are now, how little principal is going toward your debt. Apply the CD amount to the debt.
And you will see the magic bank's don't want us to see.
you will take out many years of interest, you monthly payment will be the same but you will increase the portion of Principal going to pay the debt.

[LivingAlmostLarge]

Are you saving for retirement, college, etc? Have all planned savings in place like a new car, home repairs, furniture, etc?

Then go for it?

[wincrasher]

Well if the choice is only CD returns or pay off mortgage, then yes, pay down the mortgage.

But are you missing other investment opportunities? Waiting on the markets to recover only assures that you miss out on those gains too.