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If you are like most people you’ve been scared into the thought of having an overwhelming mortgage payment for the rest of your life.

Pay down the mortgage as fast as you can.  Right?  Not necessarily.

There are circumstances when it does not make financial sense to pay down your mortgage.  Some things to consider are:

  • You don’t have an emergency fund – I recommend a minimum of 3-6 months of income in savings in case you lose your job.
  • You have unsecured debt such as a credit card or line of credit at a higher rate than your mortgage – basic math, pay the higher rate debt first.
  • Your mortgage rate is low – pay the minimum and use your cash for other opportunities.
  • You can use it to protect yourself with Life, Disability or Health Crisis protection.
  • Your mortgage payments won’t decrease unless you can renegotiate with the lender – you may need the cash for something else.
  • You don’t have an RRSP – start your retirement savings, balance the forced equity savings of mortgage payments with a preauthorized regular contribution to an RRSP.
  • You need a vacation – you work hard and have done so to get yourself into your home now don’t forget to celebrate and enjoy a vacation.

Everyone has a different financial position and the mortgage is just one piece of the puzzle.  I recommend everyone work with a trusted Financial Advisor to put the pieces together.

Contact me now for you referral to a trusted Advisor or for vacation destination recommendations!