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Jason14h · 07-13-2023, 10:55 AM

You can get 6% GICs (or close) right now

Assuming you have room in a TFSA that’s tax free 6% no risk . Why would
You pay down a 2-3% mortgage faster ?

If it’s not in a tax account you have to account for taxes on interest so it’s closer but you’re almost guaranteed still to come out ahead

Now at 7.2% (prime) you need ~9-10% on before tax investment income , so at that point paying off mortgage faster starts to be economical

If you are a prudent saver paying down a low interest mortgage is a bad ROI

This is all ignoring the max lump sums you can make and if you are worried about hitting that in 3 years if you wanted to do a lump sum on renewal of interest rates are still high

07-13-2023, 10:55 AM	#1527
Jason14h Franchise Player Join Date: Oct 2005 Exp:	You can get 6% GICs (or close) right now Assuming you have room in a TFSA that’s tax free 6% no risk . Why would You pay down a 2-3% mortgage faster ? If it’s not in a tax account you have to account for taxes on interest so it’s closer but you’re almost guaranteed still to come out ahead Now at 7.2% (prime) you need ~9-10% on before tax investment income , so at that point paying off mortgage faster starts to be economical If you are a prudent saver paying down a low interest mortgage is a bad ROI This is all ignoring the max lump sums you can make and if you are worried about hitting that in 3 years if you wanted to do a lump sum on renewal of interest rates are still high