Some homeowners dream of paying off their mortgage. What could be better than freeing up that money so you can spend it on other things? Before you try to double or triple your mortgage payment to erase the debt, think about the pros and cons of paying your mortgage off early.

PRO: You Save Money on Interest

If you received a large bonus or inheritance, paying off your mortgage could be a smart move. If you have one of the bad credit mortgages, you could be paying lots of money in interest every month. Depending on how long you have left on your mortgage, you could end up saving thousands of dollars in interest.

CON: You Can’t Take the Interest Off Your Taxes

Itemizing deductions means you can take your mortgage’s interest off your yearly taxes, which could save you a hefty sum. If you pay your mortgage off early, there won’t be any tax benefits because you won’t be paying interest. You may not even have enough deductions to bother itemizing.

PRO: Peace of Mind

You may sleep better at night knowing there isn’t a monthly mortgage payment hanging over your head. In addition, you won’t have to worry about dealing with a foreclosure if you or your spouse becomes ill or loses a job. A free and clear home is a comforting thought.

CON: Your Money May Be Better Spent on Other Debts

Paying off a low-interest mortgage doesn’t make sense if you have a car note or credit card balances that are costing you double or triple the interest. If this is the case, it makes more sense to pay those higher-interest debts off before you tackle your mortgage.

PRO: It Decreases Your Monthly Expenses

Having less money going out every month holds appeal. If you want to go back to school, if you would like to quit working full time, or if you’re thinking about retiring and won’t have as much income coming in every month, paying your mortgage off early could be a smart move. Depending on your situation, refinancing your home could help this situation, too.

CON: A Paid-Off Mortgage May Hurt Your Credit Score

Part of your credit score is calculated from the different types of debt you carry. If your mortgage is your only installment loan, and you pay it off, this could hurt your credit score. This shouldn’t play a big part in your decision, however, because it shouldn’t affect your score by more than a few points. It is smart to be aware the change may occur.

Every household is different with their goals and plans for the future. Paying off your mortgage early may be smart, or there might be better ways to use your money. The decision depends on where you are in life and your specific situation.