Home Forums Frugal Ideas Housing expenses Re: Re: Housing expenses

Eric Poulin
Keymaster
Post count: 374

My opinion is: you’re dong what’s best according to the current market situation and according to the math.

However, you need to factor in your risk tolerance.  I know of someone who, at the first opportunity, paid off his mortgage, even though interest rates were low and he could have invested the money in other places.  We’ve seen wild fluctuations in the financial markets over recent months/years and one’s investments could quickly become devalued and mortgage rates can go higher than expected.  Yes, corporate bonds are relatively safe compared with mutual funds and other riskier investments.  However, as the end of this story about this person goes… once they paid off their mortgage (early in life) they had no debt and walked around with a smile on their face whistling :) 

For me, although I know the math is better the way you are doing it, I’m planning to balance my effort between investing and prepaying mortgage, with an emphasis on paying off that mortgage and eliminating all debt for the personal satisfaction and just in case interest rates go crazy, as has happened in the past.