Which debt 1st?

[rockrv22]

I have a mortgage with about $44000 left on it to pay. Which is about 7 years left. The rate is 3.25%. I also have a car loan with about $23000 left on it @ 2.5%. I really want to knock out mortgage!!! Last month paid almost $5000 extra on it. Is this dumb? Have well over emergency fund! And maxing out Roth Ira and putting in 401k.

[scfr]

Is this dumb?

Nope.

[Jluke]

I’ll guess that the mortgage (P&I) has a higher monthly payment so I would put extra towards that; also mainly because the mortgage balance is low and you are close to payoff.

[bjl584]

I'd probably lean toward paying off the debt that is funding a depreciating asset and has no tax write off ability first. i.e. Car Loan.

[rockrv22]

I can't write off any of the mortgage. Have to take standard deduction.

[bjl584]

I can't write off any of the mortgage. Have to take standard deduction.

The car is still depreciating.

[MonkeyMama]

Not enough info to say. How old are you and how much are you saving for retirement (percentage of gross income)?

I'd generally lean towards paying off the depreciating asset, but the mortgage has a higher interest rate and it sounds like you could pay off quickly.

[MonkeyMama]

Not enough info to say. How old are you and how much are you saving for retirement (percentage of gross income)?

I'd generally lean towards paying off the depreciating asset, but the mortgage has a higher interest rate and it sounds like you could pay off quickly.

I looked up your other posts on this topic (you had a few lately). Early 30s, putting 7% to 401k and also funding an IRA? No idea what this means since I don't know what percentage total you are putting into retirement. It also depends how well you have saved for retirement already.

[rockrv22]

We are putting about 15% to retirement been doing close to that since I was 18

[MonkeyMama]

We are putting about 15% to retirement been doing close to that since I was 18

In that case, I'd just pay down the mortgage. I think it could be more beneficial to pay down the auto first, but I don't think it's a bad idea to just pay down the mortgage if that is your preference. Kind of a coin flip.

[disneysteve]

I think it could be more beneficial to pay down the auto first, but I don't think it's a bad idea to just pay down the mortgage if that is your preference. Kind of a coin flip.

Why would paying off the car be more beneficial if the interest rate is higher on the mortgage?

[MonkeyMama]

Why would paying off the car be more beneficial if the interest rate is higher on the mortgage?

Because it's a depreciating asset. Easier to end up upside down and trapped. A car is also more likely to be totaled. The car also has a lower balance and can be eradicated more quickly. The interest rate difference is negligible.

[greenskeeper]

I'd trade the car in for a vehicle purchased with cash.

Apply the now non-existent car payment towards the mortgage....BOOM

[LivingAlmostLarge]

agree with MM and pay off car then house.

[rockrv22]

Got the house down to almost $40000!!!!!!