Should You Pay Down Your Mortgage or Invest?
Have extra cash? Should you invest it or use it to pay down your mortgage?
When you pre-pay part of your mortgage, you end up paying less in interest. But as a result, you lose part of your mortgage interest tax break.
Your true savings, then can be expressed as the difference between your mortgage interest rate and the rate at which you take your mortgage interest deduction (a function of your marginal tax rate). If that net percentage figure is less than the amount you could make investing the cash you're better off investing it.
Posted at 02:44PM Nov 08, 2010 by Louisa Ward & Robyn Viktor in General | Comments[0]
