Quote:
Originally Posted by Skaloper
"Borrowing money was necessary for house, but paying the minimum and increasing the duration of interest paid for the convenience of debt is unnecessary."
I know everyone has a different situation but my wife and I just had our first child at 33 and 32. We did choose to buy a house after prices skyrocketed but didn't want to put our lives on hold. We both have decent jobs but paying more into the mortgage isn't really feasible especially with childcare on the horizon. So yes we are forced into paying minimum and don't think it's necessarily a bad thing. Definitely won't have the house paid by 45 as that is a pipe dream for most our age unless you're making crazy amounts. That being said we do have some put aside for retirement from pensions and RRSP.
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Paying down your mortgage faster vs investing just comes down to math, peace of mind and more then anything - discipline
Your expected rate of return in the market and the tax situation of you investments vs your mortgage rate
But the discipline is the big factor . Can you be discipline and invest the same extra each month, and not get emotional or spend it on other things
For most of the last 2 decades paying your mortgage early vs putting into investments was a 'bad' investment choice. The interests rates vs ROR were skewed heavily in favor on investing.
With higher interest rates it becomes more of a choice. Especially if you have maxed out your tax deferred options and need to pay capital gains on any returns.
A 7% mortgage would require a non tax deferred return of ~9-10% to be equal. That is about at historical long term RoR for US Markets.
Paying down your mortgage is always the risk free way to force savings, but isn't always (or usually) actually the best long term way to maximize net worth