4 October, 2019
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“A mortgage is a very large debt that is going to be paid over a very long time,” says Cindy Marques, an Advocis board member and Toronto-based independent CFP. At the same time, she comments, “If you’re going to wait 30 years before you even start saving, you’re missing out on a lot of potential investment growth.”
It is possible for homeowners to earn higher returns on their investments than the rates they pay on their debt. While this spread can be attractive, a mortgage is a significant obligation and there are a number of factors to consider in deciding whether to invest before the mortgage is paid off.
Some homeowners aim to buy a second property to build equity – but they need enough cash to make the purchase. If this is the goal and, “You focus all your energy on [paying down your first mortgage], it’s going to take you forever to save up for that down payment,” says Marques.