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Old 07-13-2023, 02:05 PM   #1561
Slava
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Join Date: Dec 2006
Location: Calgary, Alberta
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Quote:
Originally Posted by you&me View Post
Wait... We don't have all of the details, but there are some pretty safe assumptions that can be extrapolated depending on the specific case.

Like if you have a spare $25k sitting around and can put it in a GIC at 6%, or pay down your 3% mortgage by $25k, the interest earned in the GIC will be greater than the interest saved by the reduction in the mortgage principle (disregarding taxes, etc).

To argue otherwise would demonstrate a poor comprehension of reading math.

That all said, the peace of mind on having less / no mortgage is priceless.

Edit - opendoor beat me to it.
Well the real issue in these questions is that we don't know what the savings really are. Like you put that $25k against the mortgage today, and at the end of 22 years (for example) we know the savings because we know what the interest rates were and we know how many months you shaved off with the lump sum.

Was gaining say 3% for three years worth the delay? Maybe. But we can't know. All we know is how one option plays out over 3 years with full certainty.
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