Keeping a mortgage is also used as a tax write off. So a lot of people who could afford to pay off their homes don't because of that as well.
this post was submitted on 17 Jul 2025
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We know you're good for themoney now you don't have the extra outgoings!
So... I have a guess as to why this is. It might be entirely wrong, but it kind of makes sense to me. I would bet the bank also partially insures your home when they hold your mortgage, and so the two insurers/policies split the liability in that case. When your mortgage is paid up, the bank no longer has stake in the home and doesn't insure it anymore, meaning the full liability falls on your insurance policy alone now. So they likely raise your premiums to account for the hightened risk on themselves. That's not necessarily a justification and it obviously sucks for you, but, it does make some amount of sense IF my guess is correct.
Either way, paying off your mortgage is a big accomplishment and removes a big burden from your shoulders. So kudos on that at least.
My guess would be that it is a proxy for income. As far as i am aware credit bureaus do not have access to information about how much a person earns. However if you are paying off a $2k mortgage each month, then the assumption is made that you have either enough funds or income to afford it. Once you pay off your loan it becomes a black box again, as there'd be no way of telling whether or not this is still the case.
Could be something like that too, yea. Getting a mortgage means the bank, which does know your financials at that time, approved of the loan, and then continued payments without delinquency would indicate that your finances have not made a turn downward.
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