Finance & economics | Buttonwood

Why you should repay your mortgage early

For the first time in decades, the arithmetic suggests settling housing loans

illustration of a house cut in half diagonally, the lower corner being a bill.
Illustration: Satoshi Kambayashi
|4 min read

The holiday from reality, for the happy few enjoying it, has been delightful. Three years ago it was still possible to fix a mortgage rate in Britain and much of the euro area at somewhere near 1%. American housing loans were dearer by just a percentage point or two. Even as interest rates have risen and borrowing costs for new mortgages have doubled or tripled, homeowners who locked in the enviable rates of the early 2020s have been living blissfully in the past. Moreover, the inflation that prompted rates to rise has bitten chunks out of the real value of their debt.

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This article appeared in the Finance & economics section of the print edition under the headline “Home truths”

From the February 15th 2025 edition

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