NerdWallet's Smart Money Podcast - Spring Homebuying in 2026 and the Case for Never Paying Off Your Mortgage

Episode Date: April 30, 2026

Is spring still the right time to buy a home, and does carrying a mortgage forever actually make more financial sense? Before entering into the “forever mortgage” debate, hosts Sean Pyles, CFP��, and Elizabeth Ayoola are joined by senior news writer Anna Helhoski and mortgage writers Abby Badach Doyle and Kate Wood to examine why 2026's spring housing market is falling short of expectations. They explain what declining home sales data and 30-year mortgage rates hovering above 6% reveal about buyer and seller hesitation, how economic uncertainty is driving different outcomes across local markets around the country, and whether the timing is right to make a move. Then, Sean, Elizabeth, and Kate unpack the question of whether carrying a mortgage into retirement could actually be a smarter wealth-building strategy than paying it off early. They break down what the life cycle hypothesis says about holding debt in retirement, what happens to the math when you weigh opportunity cost and market returns against mortgage payoff, and what personal and financial blind spots could make or break the strategy for you. Check out our Mortgage Amortization Calculator: https://www.nerdwallet.com/mortgages/calculators/amortization  Check out our Mortgage Calculator: https://www.nerdwallet.com/mortgages/calculators/how-much-can-i-borrow  Inspired to navigate your finances with an advisor? Use NerdWallet Advisors Match to find vetted professionals today at https://www.nerdwalletadvisors.com/match Want us to review your budget? Fill out this form — completely anonymously if you want — and we might feature your budget in a future segment! https://docs.google.com/forms/d/e/1FAIpQLScK53yAufsc4v5UpghhVfxtk2MoyooHzlSIRBnRxUPl3hKBig/viewform?usp=header To send the Nerds your money questions, call or text the Nerd hotline at 901-730-6373 or email [e-mail]. Like what you hear? Please leave us a review and tell a friend. Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome aboard via rail. Please sit and enjoy. Please sit and sip. Play. Post. Taste. View and enjoy. Via rail, love the way.

Hey, Elizabeth, we have to talk about the newsletter. What newsletter are you talking about, Sean? You mean the new, free, smart money email newsletter? Yes, and I have to say it is so good. It really is. It has clips, episode roundups, and behind the scenes. takes from me, you, and our producer, the stuff that makes you feel like you're really part of the show. And listeners, for the record, you actually are part of the show. I'm going to be sharing personal

stuff. You know, I love sharing my business, and I'm going to be sharing parenting tips from an 8-year-old and a single mom perspective. And I am loading up the newsletter with my favorite gardening tips and lots of cute photos from my garden, including my pets, just napping among my flower beds. It's kind of adorable. And the best part is that this newsletter is totally free. So head to nerdwollet.com slash podcast to sign up. For the record, that's nerdwollet.com slash podcast. Come hang out with us. The spring home buying season has traditionally been the time to rush into the market.

But much like how our climate is changing, the annual ebbs and flows of the housing market are shifting to. Today we'll discuss whether the spring home buying season is still a smart time to get into the market. And then we're going to go deeper into the debate around the forever mortgage. Welcome to Nerd Wallet's Smart Money Podcast, where you send us your money questions and we answer them with the help of our genius nerds. I'm Sean Piles. And I'm Elizabeth Ayala. Later this episode, we'll be having a forever mortgage debate as requested by your listener. But first, our weekly money news roundup, where we break down the latest in the world of finance to help you be smarter with your money.

Our news colleague, Ana Hal Hosski, is back to talk about home buying in the spring season. Welcome back, Anna. Yeah, thanks for having me, as always, Elizabeth and Sean. Yeah, spring is usually the busiest time of the year for the housing market. There's more buyers, more listings, more activity in general. But this year, things feel a little bit off. Home sales are down. Mortgage rates are still hovering above 6%, and economic uncertainty is making people pretty hesitant to take on such a big commitment. So is spring home buying season canceled? To find out, we're joined by mortgage writers Abby Baydack Doyle and Kate. would. Abby and Kate, thanks for joining us. Thanks for having us. Good to be here. Abby, let's start with the big picture. Expectations for the spring housing market were pretty high. So why does the reality right now feel so different? For the past few years, it feels like following the housing market has been a little like rooting for a long-suffering baseball franchise. Like in the off season, there's a sense of hope, like things are licking up. And then by spring, you're just back to that

familiar sense of disappointment. Every year. I'm from Pittsburgh, home of the pirate, so I've earned this take. But it's true, though. Like, as recently as February, it looked like this spring would be a back-to-normal kind of year for home buying. And that abruptly stopped when the Iran war began on February 28th. And fast forward to now, the ripple effects from the conflict are showing up in the

economy from energy prices to financial markets. So now buyers and sellers. are uncertain. And it's going from being a vibe to showing up in the data. Based on the current market activity or lack thereof, the National Association of Realtors has actually scaled back its forecast of home sales for this year. So it now expects about 4% growth down from 14%, which was its forecast just a few months ago. Dude, I so relate to the just like, oh, dang, got to change my forecast. So I write a mortgage rate a mortgage rate forecast every month and like, let me tell you how March went. So I handed in my draft on Friday, February 27th, when things were looking

so good. The previous day, Freddie Max's average 30-year rate had officially moved below 6%. It was prime time. It was finally going to happen. And then the war began on Saturday. That forecast, like, I can't even say like, oh, it aged like milk because this was like no time. Like this wasn't even like, oh, it took a week. This was like you open the dairy product and you're I'm already smelling it. I literally just bought this. Like, how is this so bad? Yeah, it's pretty gross. So let's look into the latest numbers. Existing home sales have been a bit muted lately. They're down 3.6% from February to March, and that's 1% lower than a year ago. Kate, what are your thoughts? So honestly, I was a little bit surprised that existing home sales weren't a tiny bit stronger in March, just given where mortgage interest rates were in February. Home loans can take weeks to close. So, you know, a good number of March sales are going to be folks who locked their rates back in February. You know, rates were not dramatically lower back then. But the psychological impact of 30-year rates moving below 6%,

I don't know, I would have thought it would have motivated more buyers. So some buyers might have even been waiting for rates to go lower, and that certainly didn't pan out. So now, you know, prospective home buyers who are planning to begin their surges in spring might be rethinking those plans given, like, the current geopolitical climate, let alone the interest rate climate. Consumer confidence has really been sliding, and that could have buyers as well as sellers

choosing to sit out the spring home buying season. Yeah, consumer confidence has just gone way down. It's just tanking. Abby, what economic forces are at play that are making home buyers and sellers hesitant? One helpful way to think about it is that there's two kinds of pressure on people's finances right now,

the stuff that's actually happening and then the stuff that people think might happen next. So on the real side, you've got things like higher gas prices or a labor market that makes it harder to find a job or get a raise. And then on the anticipated side, there's this looming fear of a recession, right? And even if it hasn't happened, even if it never happens, people are still worried about what it could mean for their income, their savings, their job security. And here's the tricky part. When enough people pull back for those anticipated reasons, it can actually slow the economy down further. And that could be what we're seeing now in the housing market.

Yeah, you're sort of what if worst case scenario feels like a little too reasonable lately. And when we talk about the housing market nationally, it can sound like one big story, but that's not really how it works, right? Yeah, exactly. We always hear that maxim of location, location, location. That's not just true about the individual house. So one of the biggest things to understand right now is that there isn't just one housing market. This is really a collection of local markets, and those can feel really different from one another. So right now, we're seeing a mix of conditions at the same time.

So parts of the northeast, where I live, Midwest, more rabbi is, for example, inventory is still pretty tight and homes can move quickly. But in other areas, especially parts of the south and west, more where Elizabeth's at and Sean at the moment, the market's shifting more toward buyers. So in a buyer's market, homes are sitting a little longer. there's more inventory. Buyers have a little room to negotiate. So when you're looking at these national averages that say things like the market's slowing or the market's uneven,

what it actually feels like depends a lot on where you are. It's kind of like when you see headlines about how like record heat or cold is gripping the nation and you're like, okay, but it's fine right now where I am. Yeah, and that's probably adding to the confusion for buyers and sellers. Exactly. So I mean, you might hear, oh, the market's cooling,

but if you're someone who's still facing competition in your city, you're like, what's going on? Or the opposite. And that's really why local conditions matter so much right now, not just the national headlines. If you are considering buying or selling, this would really be an opportune time to reach out to a local real estate agent, get an on-the-ground view of your area. Now, Abby, a lot of listeners might be wondering if things are feeling shaky. Is this a bad time to buy or sell? That's a fair question. and when headlines feel uncertain, big decisions feel riskier.

And buying home is one of the biggest financial decisions that there is. So when you're dealing with that real financial pressure and the what-if pressure feeling, it totally makes sense to pause. So for you, if your budget is tight or if you're worried about your job, taking a step back and just pausing right now can totally be a smart move. That kind of helps you avoid getting in over your head or having those financial regrets later. But at the same time, waiting for everything to feel perfectly certain, that's just not realistic, right? So it all comes down to your situation. Are you financially ready? Does the timing make sense for you?

Because if you're trying to time the market perfectly, you might never make a move. Okay. Any final thoughts for listeners? I think the big thing to keep in mind is that slower is not the same thing as stopped. Homes are still being bought and sold just with like a little more caution. If you're a long-time smart money listener, you might remember our former colleague Holden Lewis, who's since retired. He used to always say buying and selling houses is like getting married or having a baby. Like at any given time, sure, fewer people might be doing it, but it never stops.

So for home buyers, a slower market could mean less competition. For sellers, it might mean you need to price more carefully if you want to make sure that our property is going to move quickly. Overall, though, this isn't a market that's canceled. It's just one that's moving at a different pace than people were expecting. All right, Abby and Kate, thanks so much for joining us. Thanks, Anna. I was happy to be here. And thank you, Anna.

Up next, Kate joins us again as we answer listeners' question about the forever mortgage debate. But before we get into that, listener, a reminder to send us your money questions. Maybe you're trying to figure out whether it's smart for you personally to get into the housing market or you're trying to save for a down payment on a house. Or maybe you just want a new credit card for the summer travel season and aren't sure which one is best for you. Whatever your money question, hit us up on the nerd hotline. You can leave us a voicemail or text us at 901-730 6373. That's 901-730 nerd.

You can also email us at podcast atnerball.com or drop us a comment on Spotify or YouTube. In a moment, this episode's money question. Stay with us. Want to go electric without sacrificing fun? That's the Volkswagen ID4. All electric and thoughtfully designed to elevate your modern lifestyle. The Volkswagen ID4 is fun to drive with Instagram. an acceleration that makes city streets feel like open roads, plus a refined interior with innovative

technology always at your fingertips. The all-electric ID4, you deserve more fun. Visit vw.ca to learn more. SUVW, German engineered for all. We are back in answering your money questions so that we can help you make smarter financial decisions, as per usual. This episode's question comes from a listener by text. I would love for you to frame up the forever mortgage debate. While previous generations prioritize burning of the mortgages as the ultimate sign of financial freedom, I feel like modern economic conditions will allow for me to maintain a low-cost mortgage into retirement, and that may actually be the superior wealth tool, even at a 5.5% interest rate. Historical returns in the stock market are better,

and would be a net positive, according to research in the life cycle hypothesis. Additionally, real estate and mortgages allow for unique opportunity to leverage the bank's money as an investment in my property that is appreciating. I know this is a psychological shift when compared to previous generations. The last thought I'll make is the inflationary subsidy, which identifies how the value of our debt shrinks over time. Thus, the fixed rate debt is one of the few hedges where the borrower wins as currencies devalued. I love the thoughtful, nerdy question we have. here. To help us answer it, we're joined on this episode by our go-to mortgage nerd Kate Wood. Kate, welcome back to smart money. Oh, thanks for having me. So let's just dive in with some

terminology first. Can you explain what a forever mortgage is? So the forever mortgage is basically the idea that you've got a home loan and it is not going anywhere. So you're not moving, you're not selling. You're definitely not trying to pay off a loan ahead of schedule. The standard mortgage term in the U.S. is 30 years. But usually the expectation is that you're not going to live in that home for 30 years, let alone pay that mortgage for that long, you're basically getting a lengthy loan term because that helps your monthly payments be lower and more manageable. Forever mortgage is kind of like, but what if I am paying the mortgage for that long? Okay, so just to be crystal clear, this is not a loan term that is perpetual or infinite.

It is just that you will stick to your 30-year term, not rush to pay it off in any way. And it's also not a 50-year term, which we heard talk about last year. It's just you have generally a 30-year mortgage and you're committing to that. Yeah, but a 30-year mortgage is actually really long compared to the rest of the world, particularly a 30-year fixed rate mortgage, as his listener notes, is relatively disadvantageous to lenders and fairly generous to buyers. This is the way things were set up in the U.S. in the first half of the 20th century and we stuck with it. Pretty much anywhere else on earth, you're either looking at adjustable rates or you're looking at shorter loan terms

where every couple of years, it's like, no, we're going to have you renegotiate. this so that you're at prevailing interest rates. Yeah, 30 years is a long time. It's a long time. It's a rare instance where the American banking and financial system is actually better for consumers than maybe elsewhere in the world. It's wild. I'll take it. Okay, well, let's get to the crux of the forever mortgage debate.

It seems like the main argument is whether you should be investing or paying off your mortgage faster. So generally, you see this framed as, should I be putting money toward paying off my mortgage or toward investing? So essentially, could you make more money by investing a set? dollar amount each month, then you would save on interest if you were to put that same dollar amount toward paying off your mortgage. I want us to pause and rewind a little bit. The listener talked about something called the life cycle hypothesis. So we're going to get a bit nerdy here and break that down. What exactly is the life cycle hypothesis? What's that about Kate? So the life cycle hypothesis is the idea that people want to maintain the same level of consumption

throughout their lifetime. And so you're doing this by kind of having different financial strategies depending on what stage of life you're in. So in theory, you're taking out your biggest debts like student loans or a mortgage during your earlier years. Your income is lower, right? Later, you're saving aggressively and you're paying down that debt during your peak earning years. The idea is that once you retire, you've kind of wrapped things up. Ideally, you're debt-free. You're able to spend the wealth you've felt, plus potentially leave an inheritance behind. That sounds like an ideal retirement to me. Now tell me how this forever mortgage concept blows up this hypothesis, Kate.

So the forever mortgage basically blows this hypothesis to hell because part of the idea is that, yeah, you're carrying the debt into retirement and that's not problematic. So our listener is making the argument that potential market returns make it worthwhile because those returns exceed the interest rate that you're paying on the mortgage. If you want to get into the numbers here and see how it actually works, you can use a debt versus investing calculator to lay it all out. Nerd wallet has one that you can use it for free. And of course, you can find a link to that in today's episode description.

A key concept in this debate is the idea of opportunity costs. And this is when the tentative profit you could have gotten from one option is lost because you chose an alternative. So in other words, if you pay off your mortgage early, you could be missing out on opportunities in the market. And then on the other side, if you keep the mortgage, you could be missing out on opportunities at a company a paid off mortgage. So Kate, can we talk a little more about what the opportunity cost of each option would be? So it's really hard to get into numbers here because if we are

talking investing, and I am not an investment advisor, so I'm speaking as generally as possible here, you're looking at predicting a rate of return that is inherently unpredictable because it's the market. But that said, I did play around with a debt versus investing calculator. And yes, It's meant to compare paying down debt with putting your money in savings, but I put in the historic return on the S&P 500, so 10% as my savings interest rate to kind of get an idea where we'd land. So the listener mentioned a 5.5% mortgage rate. So I entered that.

My imaginary home loan also still had 25 years to go, $300,000 bounce. I've got, let's say, $1,000 a month that I can either put toward paying down my mortgage or toward investing. So at that 10% rate of return on my hypothetical investment, the amount of interest I would save on the debt by paying off the mortgage was actually almost double what I'd make in interest on my investments. So high 800s versus mid-400s, not the best. But say we're feeling, you know, we're pretty bullish.

We're feeling optimistic. And we think that we could get a higher rate of return. So if we look at like S&P average over the past 10 years, that's a 15% rate of return. So now the high 800s that I'd save in interest with my mortgage repayment is actually overshadowed by the cool million I would make investing. So it does kind of feel like something where you could find a way to make them numbers tell you the story that you want to hear. Yeah. And there's so much uncertainty around this because we don't know what the market is going to do, what home values will be like in the future. And yes, we saw 15% rate of return over the past 10 years or so. That's a bit of an aberration. And there's no guarantee.

we'll see that in the future. So you just don't know. So are we telling listeners basically that they're gambling? Investing comes with risk. I'll say that. Fancy way of putting it, Sean. All right. The listener brings up the idea of using a mortgage as a way to leverage the bank's money to invest in your home, which they describe as an appreciating asset. And they also frame it in a way that the asset will always appreciate, which I don't think is true. So I don't completely agree with that, considering that your home isn't always an appreciating asset. Obviously depends on the type of market you're in. But yeah, what are your thoughts on this, Kate? Yes, I 100% agree with you, Elizabeth. So I want to be really clear that I am not saying the housing market is about to crash. I would

not say anything even remotely close to that. But at the same time, it's really important to acknowledge that real estate, just like any other investment, like we just said, is not guaranteed to simply go up forever. Another thing is that the rate at which home values appreciate varies. So we had a couple years post-pandemic where home values were increasing absolutely wild amounts, like double-digit year every year. Now that's slowed considerably and in a few parts of the country that got really overheated, it's reversed slightly. I have a mini side quest Kate. Some people argue that your primary residence is not an investment because you live there and you're paying expenses out of pocket and it's not as liquid as let's say stocks.

Now, the exception might be having tenants and then paying expenses and helping you generate income. But conversely, one could argue that if you build up enough equity in your home, that could be leverage and invested. This is really like the fundamental question of homeownership in the United States. Like, is this something that is a public good and that we want for everybody and is simply important for us to have? Or is this a vehicle for wealth? because, you know, your home is a source of wealth, but it's kind of a weird one, right? So, like, on one hand, it's worth a lot. This is likely the most valuable thing you own. But on the other hand, like, to use that wealth to access that wealth, like, I don't think solid asset is a thing,

people say, but this is like a solid asset. Like, it is as illiquid as you can get. Additionally, as long as we're talking about a primary residence, this is your home. So it's not just money. It's not just, you know, the bills you pay, it's probably like a pretty significant emotional investment. And so we don't always think about this in terms of dollars and cents. For some people who are really intent on early mortgage payoff, the goal is really about this is my home and I'm going to own my home outright rather than, you know, here's what I'm going to save on interest. I actually have friends who came into a small windfall and that was what they decided to do. Their home was their only installment debt that they had and they were just like,

you know what, it would be cool to say that like, we own, we own our house. Like, we're debt-free. We own our house. And that really speaks to how this is not always a mathematical question. It's really an emotional one, too. It can feel, feel great to not have a debt that you're paying off on a regular basis. On the other hand, if you want to make sure you're set up for success in retirement, it may have been wiser, quote unquote, from a number standpoint, if your friends had invested that windfall, but that was their personal decision. And that's okay. Yeah. I'm also thinking about how you really do need some discipline for the Forever Mortgage Strategy to work while you're investing at the same time. So, Kate, I'm wondering what you think might be some

common ways that people might mess up this strategy if they maybe aren't so disciplined. I mean, really the main way would be spending that investment fund elsewhere, right? This money that you've set aside that you're putting toward investing rather than paying down your mortgage. What happens if you use it for a third thing? And sometimes, you know what, that might be intentional because you've had an emergency expense come up that has absolutely got to be dealt with. Possibly, though, it could be more just sort of like, oh, I forgot and this money's right here in my account. So, you know, I could use it. Yeah, you want to go on vacation. You know, there's also the possibility, since we are talking a forever time span here, so pretty long, there's

the possibility that, like, your priorities are going to change, right? Yeah. So maybe you were just, like, child free and, like, loving this, like, single, no kid's life. But then you meet someone, And it's just like, oh, my goodness, the whole world has changed. And now you've got like a kid on the way, right? And that bundle of joy is like a big whole bundle of expenses. So when you start looking, right? Yes. I mean, like, am I wrong?

Like, no. And so when you're looking at like, like, how are we going to pay, you know, for daycare or something like that, like, yeah, you might start eyeing that money that you had earmarked for investment. Another thing is that like your income, of course, can change too. So that could be because you've changed jobs. Your household income has changed. you know, maybe you and your partner are all in on this strategy, but then you divorce. And like, even if you're the one who keeps the home, are you still going to have that much money to fund this investing? I'd also say, and I feel like I have to say this because this is a nerd wallet and we

always say stuff like this. Before you're considering putting this quote unquote extra money toward investing or your mortgage, are your basic financial bases covered? You know, do you have an adequate emergency fund is a big one that comes to mine? Yeah. And I also, thinking about how the forever mortgage argument has some blind spots. One is the assumption that you'll have the means to continue paying a mortgage into retirement. And that's not always going to be the case. In a worst case scenario, a few emergency expenses could wipe out your savings. And that might make it difficult to cover your housing costs. And also, even if you don't have a mortgage, it's not like your housing costs go away entirely because you'll still have things like property taxes to pay.

Absolutely. So this is really where. you would need to be diligently investing so that you're really feeling confident that you're going to be able to maintain that same standard of living, including, you know, in this case, paying your mortgage all the way into retirement. Again, like, if your circumstances change and you're looking at a significantly lower income, you could end up in a situation where you're either looking to sell the home, like get that, get the solid asset liquid, or, you know, potentially on retiring, right, going back into the workforce. Yeah, and we haven't even touched on the fact that you need to have a very sophisticated investment strategy

to know that you're investing the right amount in the right accounts, and you can withdraw that at the right rate with the right amount of risk. And I think this is something where you would want to really hire a professional to do this for you. Well, thanks for making that sound so complicated and difficult, Sean. Gee. This is where the rubber hits the road, right? Like, you have to do it the right way. Yes, you're right. Thank you. Hopefully people listening will go and hire financializing. I'm scaring everyone here, but I should be. Yes, no, no, it's a real thing, though. I'm kidding, but seriously, it's a real thing. And I love that we have pointed out the intangible, like we said, the emotional and mental parts of this forever mortgage debate. Because as we're going through and talking about this, guys, I honestly would love to pay my mortgage off if I had one.

I think peace of mind is something that everyone should have in retirement. And yes, that may look different. Some people may find peace of mind by having more money in the market and a forever mortgage. But please, I want that thing paid off in full. Yeah, I get that. I mean, just having debt can feel like such a weight on your shoulders and having that for the rest of your life just sounds like a drag and I don't really want that. Yeah. And overall, you know, that is our sort of nerd wallet party line on this. Like this is a personal decision, of course. But we don't generally advocate paying off your home loan for the sake of paying off your home loan. That said, when retirement's on the horizon, then our advice is starting to shift to like, okay, well, maybe you do want to prioritize pay. paying down that loan. Yeah. Additionally, a lot of folks might end up inadvertently in a forever mortgage strategy because of just how late a lot of people are buying houses into their life. It's not

like people are getting a house in their 20s anymore, right? Yes, definitely. And this is actually how 30-year mortgages came about in the United States. Like the idea was, if you're finishing schooling, you're going into the workforce, what would be a reasonable amount of time to pay off this loan so that you aren't paying the loan in retirement? And they came up with 30. years. But they're basing that on you entering the workforce and buying a home when you're like 18, 19, 20, right? Crazy. Not today's reality. Not today, right? Like, this has been cited pretty much everywhere because it was a bonker statistic. But like for anyone who has missed this, in 2025, the median age of first-time home buyers was 40, according to the National Association of

Realty. I'm not even there yet. Right. So yeah, exactly. So if you're taking out a 30-year loan and sticking with it, you are looking at celebrating your 70th birthday and paying off your mortgage. What? That sounds miserable, Kate. Why would you say that? Now I'm never buying a house. I'm just saying, like, that would line up. So maybe it's not forever, but it's for a real long time. I love that you gave us a little history, you know, less than there, Kate, in terms of how the 30-year mortgage came about. And it brings me to the listeners question once again. And I think it brings up a broader conversation about how perceptions of mortgages are changing over time. Now, previous generations viewed a paid-off home as the ultimate safety net, but some people,

like the listener, may argue that a $1 million mortgage and $2 million in liquid stocks is actually safer than a retiree with a paid-off $1 million home and $500,000 in stocks. Do you think people are seeing burning the mortgage, aka getting rid of it, as a sign of financial freedom. Well, some people definitely do. And we know that there are folks out there who really advocate prioritizing paying off debt being debt-free. Like I can't think of his name, but it's something like rave damsy. He's always, like he is always talking about stuff like this, right? Seriously, I was actually talking to one of the other writers on my team recently because she's been working on an article about this debate. And something that she mentioned is the idea that,

you know, like so many other things like overall in the culture, but also in personal finance, this is really cyclical. So, like, in the 90s, it was much more like, hey, it's okay to have debt. Like, this is a good debt to have. Whereas we shift into the 2000s, especially with the housing crash, views shifted to like, oh, God, you know, your mortgage is a trap and you need to get rid of it. And how have you seen perceptions of mortgages change in maybe just the past five or 10 years? So this kind of ties back to what I was just talking about. But I think something that's probably supporting the idea of the forever mortgage is that we're really not demonizing mortgage lenders and servicers the way that we were like 15 odd years ago. So part of this is that legitimately there

are fewer bad actors, mainly because we had so much regulation of mortgage lending that came out of that crisis. So now we have much more rigorous underwriting standards. Lenders are required to lay out loan terms in like a clear and systematic way. And loan products that were pretty literally traps like balloon mortgages are just not a thing anymore. And so I think because of all this, people aren't really out there like, oh, you know, I love my mortgage servicer. But at the same time, like, you don't have this active resentment toward paying that bill every month. Yeah, there's something about having a mortgage where it actually feels like a luxury if someone has a mortgage. Right. No, it's kind of like, yeah, I have a mortgage. Yeah, I think it's a bragging point right now. I think I'm also like particularly keyed into this

because I do a lot of work on, so all things lending. So mortgage is personal loans and particularly student loans. And if you want a loan category where people are absolutely furious with their servicers, the entire system completely resent having to pay that bill, like that is student loans right now. Can I test. I hate my student loans. All right, Kate, now we're going to round this up because we love a good scenario on this show. If you were 45 years old today with a 5.5% rate, you had an extra 100K. Would you put it towards the principal on your morning? mortgage or would you put it into the S&P 500 and why? Okay, so this is kind of not a scenario because I am 45 years old.

No, you're not. No, I, yeah, I very am. Yeah, so. Shocked. Wow. I thought that you were like fully 32 years old. Yeah, no, really. No, you have to say that.

No, I'm not lying. Big reveal. I'm 45 and that is very true. So the house that we're living in now, our mortgage rates actually lower than that. But even if we were at 5.5%, I would pretty much like split the difference. So we do always pay extra toward the mortgage principle. Like not the thousand dollars that I was giving in my example, but like a few hundred. Because, you know, being able to pay a little extra, you're shaving time and interest off.

Your mortgage is nice, right? It's fun to like look at your amortization schedule and be like, oh, like, look what I did. At the same time, though, like, I am not at all interested and aggressively. paying off our home loan because, like, one, overall, that bill is affordable. On the other hand, what am I doing? I am maxing out my 401k and Roth contributions because as someone who, like, really did not start making grown up money until her late 30s, I'm like really, really, really playing catch up for someone my age. Also, we kind of mentioned this before, but so being like, oh, I'm free and clear on the house, that would not be a big deal to me. So I live in a state where

the largest part of our mortgage payment is the property taxes. And like Sean mentioned, your property taxes, your homeowners insurance, that does not go away just because you pay it off your mortgage. So for me, it definitely wouldn't be like, oh, my goodness, this burden is lifted. It would be like, oh, man, no one else is going to do an escrow account for me. So like, I need to find a place to stash this money so I don't spend it. Yeah. Well, I do like how you're taking a holistic approach to answering this because you're thinking

about your retirement and you're making smart use of the money by spreading it around because this isn't a situation where you have to put all of your eggs in one basket. It's not. I'm trying. Sean, you're in the hot seat now. Would you rather have a mortgage forever or pay it off as soon as possible? Well, you're going to be shocked to hear that I would do something kind of in the middle. I like a reasonable solution where I can get as much of everything that I want all at once. So like I don't really want to be paying off a house in retirement, but I also want to use my money for things today like investing for my retirement and going on vacation. So while I'm not doing this currently, Kate, I might take a page out of your book and put a little bit more toward my principal each month just because that can really help you accelerate paying off your mortgage over many, many years since they are seemingly infinite as we've been discussing. But yeah, it's not going to be my top priority because I got this life to live.

Exactly. You got this life to live. Just a mini last side quest before we close. But I, somebody that I know, well, someone that I know that knows that person, you guys know what I'm trying to say. Anyway. Sure. This lady was very financially savvy. She saved all her money.

She did all the investing. She retired last August. And sadly, she passed away last week. So she didn't even really enjoy much of her retirement money and all that she worked so hard to put in place. So just a reminder to your point, Sean, that you do need to live a little now because you can do all the right things financially and not even get to enjoy it. Oh my gosh. You are justifying my impulse shopping. Thank you, Elizabeth.

I mean, what am I here for? This is like the most sobering anecdote. I'm sorry. On a high note, I don't know. No, on a high note, I'm like, well, this is why I deserve a little treat today. Yes. That's right. Don't save them.

And hopefully people won't be having a mortgage forever. but also at the same time, do what you want with your money and cover as many bases as you can and don't feel guilty about it. Yeah, live your life. Great. Well, Kate Wood, thank you so much for coming on and talking with us about the Forever Mortgage. Oh, thank you for having me and getting me to reveal my age. Any time.

We'll have you on soon for more secret reveals. That would be great. I would love that. That's all we have for this episode. Remember that we're here to answer your money questions, so send them our way. You can leave us a voicemail or text us on the nerd hotline at 901-730-630. That's 901 730 Nerd. You can also email us at podcast at nerdwale.com or leave us a comment on Spotify or YouTube

where you can also subscribe to watch our beautiful faces every single week. We would not be here without you, so we want you to come back again and again. But next time, we're going to be talking about combining finances before getting married, a juicy topic. Follow smart money on your favorite podcast app that includes Spotify, Apple Podcast, and IHeartRadio to automatically download new episodes. Here's our brief disclaimer. We are not your financial or investment or mortgage advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances. This episode is produced by our fabulous team, and that includes Tesbigland. Hillary Georgie helped with editing. Eve Krogeman puts together our

audio and our video. A big, big, big thank you to Nerd Wallace editors for all their help. And with that said, until next time, turn to the nerds.