Should I pay off my mortgage or keep money invested in stock market?
An Anonymous User asked:
I have a 30 year mortgage fixed @ 5.25%… I owe $211K on it. I currently have $530K invested in stock market. As far as risk tolerance in market, I am at higher level….. I am 42 with no other debt and make around $100K a year. What would you do?
have 25 years left on the loan.
No brainer, pay the loan off. Talk to a finacial advisor like your accountant so you will be able to do this without penalties, and you also can find out how much you will save in the long run.
After the tax write-off aspect, your home loan is costing you around 4-4.5%. You can get a better return in the stock market depending upon the risk of the assets you pick. Always go for the highest return rate!
No brainer, invest the money.!!
Your interest rate is low and the interest is tax deductible. Invest the money in a diverse portfolio of stocks and mutual funds. Have fun…pick some stocks and invest and follow them.
One simple question………..
If your house was paid off would you go borrow against it to invest in the stocks?
There is your answer.
Quite a variation in posted answers! I agree that you should keep the funds invested rather than paying off the mortgage. You have a good fixed-rate mortgage and benefit from the tax writeoff on the interest. As far as risk tolerance for the investment, only you can decide – but at your relatively young age, a moderate amount of risk is appropriate.
The ETFs QLD or DDM will easily return at least 10.50% each year (Except in the middle of a bear market)
I suggest you to invest in the Stock Market.
Pay off the house. Once you pay off the house. The house is yours. If you dont pay off your house and something was to happen and you couldnt make your payments. The Bank will take your house.
Take what would have been your house payment every month and invest.
Its nice to have the tax break on the interest on the mortgage but, You’ll save more if you pay it off. All the tax break is is you dont pay tax’s on the interest you pay the bank. If you paid $1,000.00 a yr in interest and your in the 25% tax bracket. then you dont pay the government $250.00 in tax’s. so, if you dont pay the bank 1,000 then you have to pay the government 250.
I think id rather pay the government 250 and save myself 750.
Dont forget. You have to pay taxes on the money you make investing.
You can do both. First get an amoritization and pay 12 months at one shot. Then every month pay an add’l payment. The rest you can put into stocks.
it depends on how much capital gains you are going to pay on $211k you take out of the market to pay off the house i like this question it has a few possibilities i also like having the roof over my head payed for that’s just me.
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