Quote:
|
I'm noticing a trend on here where some people are aggressively paying down their mortgage in lieu of more RRSP and TFSA contributions. In today's interest rate environment, what's the rationale for that?
|
I can't speak for others, but at least for me and my wife, it's for life flexibility purposes. Our mortgage is our single largest household expense, and getting that off the books will allow us to do different things.
For example: my wife is feeling stressed and demotivated at her job, but searching for a new position has not left her feeling very encouraged. All the jobs in her field that interest her require taking a ~20k/yr pay cut compared to her current position. If we were living mortgage-free, she could afford to take one of those more-appealing roles while still having enough income to maintain our current lifestyle.
And it may be different for others, but aggressively paying off our mortgage vs. investing for retirement is not an either/or decision for us. We both have capped TFSAs, I'm personally saving 10% of my gross salary in my RRSP (plus another 5% contributed by my employer), and her RRSP is maxxed. Granted, we are childfree and have chosen to live in a modest Beltline condo, so those decisions have freed up ample funds that probably aren't available to households that have made different life choices.