Pay Down Mortgage or Invest?
Why is the sky blue? Why do leopards have spots? And, of course, we can’t forget yet another of life’s enduring questions: should I pay down my mortgage or invest in RRSPs?
Let’s start with some pros for paying down your mortgage:
- The more you pay up front means that the less you’ll pay in interest.
- Your house will have more equity.
- There’s the psychological benefit of not having to worry about your mortgage anymore.
Now for the cons:
- If you run into an emergency it’s easier to obtain money from savings and other investments.
- The more money you have in your house means that you risk being under-diversified.
Paying down your mortgage offers some real benefits. But, it could impede saving for retirement. It doesn’t have to be an either-or situation. There are options. Speak with a financial specialist to make sure that you make the decision that is right for you.
