Quote:
Originally Posted by Red
If you average 6% on your mortgage then you'd need to top that plus some every year. Over long term that would be a good investment. Let's not forget that mortgages were at around 10% on the 90s. Not saying that they will get there again any time soon, but if they do go up to 8% then you'd need a pretty good track record to beat that. And that's not taking in to account the risk, remember, paying off debts is guaranteed investment.
So in short if you can average 7% on your investments and that's a big if, you're only beating a guaranteed return by 1%. Is it worth the risk?
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No if your mortgage is 6% you'd need 6% less your marginal rate ... so more like 4%.
Further, even if it was 6%, just about everything does better than 6% in the long term. Shoot I think I get 6% by leaving money under the bed in a box.
Mortgages in the 80's are not relevant. Today is 2007. Mortgages are in the low 5's. Worst case 6. If interest rates rise well then re-evaluate.