Re: Would it be better to invest or pay down mortgage?
[ QUOTE ]
[ QUOTE ]
I'm a fan of paying off the mortgage. A guaranteed return of 6% is better than you can expect given average market returns (8%-12% MINUS taxes). It is a no headache way of getting an immediate return on your monies.
[/ QUOTE ]
It is easy to assume that the OP is in the highest tax bracket and is using his interest as an itemized deduction. Including his State tax his 6% savings is reduced to less than a 3.5% savings. No doubt he should put his money in the stock market.
Jimbo
[/ QUOTE ]
I keep forgetting you guys can deduct the interest you are paying on your primary residence (no such luxury in Canada). While this makes the case better for mainatining that debt, how is it different from the scenario I described where he has a fully paid off home, and takes a $150,000 loan at 6% to invest in the market? I don't see how these situations differ and they directly relate to the level of risk one is willing to take in the market.
|