Pay off Mortgage before wife quits & looks for new job?
35 y.o couple with a toddler. I make ~$210k/yr, my wife makes ~$175k/yr.
Our annual expenses are ~$130k/yr.
We can live off one income without changing much although we’d likely have to cut back on our investing contributions, but we’ve reached escape velocity where compound interest has taken over and that isn’t as important anymore. My wife intends to take a less stressful, lower paying job. I also want her to take her time in deciding her next step.
Our invested assets were $2.6M as of Jan 2026 when we last checked. (It’s definitely higher now given our contributions & investment choices) About $1M is in a brokerage account.
Mortgage
$222k remaining @ 5.25%
$2400 monthly payment
We have been making addtl $2250/mo payments (in total we pay $4600/mo to the mortgage)
Continuing with the pre-payments, we’d pay the mortgage off in about 5 years.
If we pay off the mortgage now, we’d save an additional $30k in interest payments, which incidentally is almost exactly how much we’d pay in Long term capital gains tax on a $200k withdrawal from our brokerage at 15%. (I think)
If the mortgage were paid off, our largest expense would then be daycare for our 2 year old ($1700/mo). No plans for another kid.
I like my job & I like getting a paycheck, but would love to slow down in the next few years as the kid goes into elementary school. My wife may not retire early.
At this point, I think I value getting “lower to the ground” vs “seeing how high the nest egg can go” since compound interest is doing most of the work (we contribute about $100k/yr but that would drop after wife leaves job).
I think if we pay off the mortgage now, we make it easier for me to FIRE in a few years and be able to live off my wifes lower income on our own.
We both want to be debt free, and I am operating off motivated reasoning to want to pay this off as I believe at 5.25% we are in the gray zone of if it makes sense or not so wanted some other perspectives on this. Thanks.