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Anonymous

16 Jan 2021

Property

Should I aim to pay off my mortgage loan asap by making partial payments or use those funds to invest?

Single with no dependants, aiming to be debt free and retire asap.
Should I aim to pay off my mortgage loan ($500+k) asap by making partial payments whenever I can? Or use those funds to invest?

AMA Mortgage Master

Discussion (6)

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With low interest rate environment, I would take my time to pay off the mortgage and use the extra cash for investment. The compounding effect will be able to provide better returns in the long run (and then consider paying down your loan then). But if the interest rates become too high, then making partial payment may not be a bad option (especially if you are not able to generate good returns from your investment).
Of course, if being debt free gives you the peace of mind, nobody will stop you from paying off the loan asap;)

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Chris

16 Jan 2021

Owner and Writer at Tortoisemoney.com

Depends on how high your loan interest rates are though. Although that being said, considering the low i/r environment, you'll probably get a better return investing it.

However, do keep sufficient emergency fund especially with the pandemic still ongoing to ensure you don't miss your mortgage payments.

Do also know that, while investing will probably give higher returns, many people do find comfort in being able to be debt free. Ultimately, you should choose a plan that you can stick too as well.

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