The Ideal Pace for Paying Down your Mortgage

The answer depends on 3 main factors:

  1. The total debt
    1. This is largely redundant, but the cost of debt changes relative to this value.
  2. The cost of debt
  3. Revenue from the debt
    1. If you couldn’t buy exactly enough for your needs, nor use all of it, all the time, there should be some revenue from your property.
    2. Deduct costs normally covered by rent. Condo fees, for example.

Taking those values, we can project the cost, or earnings, of the investment.


As shown in the chart above, there is an equilibrium rate that would offer a steady return, no matter how much debt. As the relative return decreases, the cost of debt decreases equivalently. The two other patterns offer radically different reactions. If earning less than equilibrium, it would best to move rapidly through the steep part of the curve. Conversely, if you earn over equilibrium, make only the regular payments, and focus on other opportunities.

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