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Pay off Mortgage .. or invest

  • 15-02-2009 11:02am
    #1
    xbmc
    Closed Accounts Posts: 33 ✭


    Owe 100K on mortgage, which has just finished it's fixed rate and now it's back on variable.

    Close to that in cash .. Job relatively safe, but how safe is anyones job these days..

    question : pay down mortage or look for a good investment oportunity.


Comments

  • #2
    Agent Smith
    Moderators, Regional East Moderators Posts: 21,504 Mod ✭✭✭✭Agent Smith


    i'd pay my morgage, In this economic climate, unless your a GP or something totally essential, no job is safe.


    Pay the morgage off, then, no matter what happens, you have a solid asset to sell.


  • #3
    Onikage
    Registered Users, Registered Users 2 Posts: 1,451 ✭✭✭Onikage


    You are getting an ok rate on your long mortgage money. If you had a great investment opportunity that would clearly be the route to take, but that's up to you. If you want to play it safe, pay off 50%-100% of the mortgage.


  • #4
    MrsJohnMurphy
    Registered Users, Registered Users 2 Posts: 67 ✭✭MrsJohnMurphy


    I wouldnt clear down the mortgage, maybe whack a lump 40k say off it, but why would you want all your money tied up in the house when you dont know whats around the corner. Better to have some money that you can access quickly in case, you do loose the job or you spot a good investment opp or something else.

    mjm


  • #5
    Adrock-aka
    Registered Users, Registered Users 2 Posts: 267 ✭✭Adrock-aka


    Wait until you have a cushion of 20K+ (120K+) and definately pay off your mortgage.

    - The 20K will suffice for any unforseen events in the near future
    - You will have a HOUSE thats yours forever (you can also use as collateral)
    - Its a terrible time to invest (especially given the opportunity cost of having a fully paid mortgage)
    - If you did invest the 100K the ROI would have to be more than your interest repayments on the mortgage or theres no point what so ever.
    - If you pay it off you can invest with money that is disposable and purely for investment purposes. This is money you can afford to lose and invest in higher risk/higher yield investments.
    - If you have a family (and if you dont then just for yourself) it would be a hell of a lot nicer to secure a home forever. This would take away huge stresses relating to redundancies etc even if your job isnt in the firing line right now.


  • #6
    Cantoris
    Closed Accounts Posts: 375 ✭✭Cantoris


    Cash is king at the moment so hang onto it. The mortgage rates are so low that there is no huge benefit paying it off. Cheap money in the long term. You are prob better off accelerating your mortgage payments out of you income and keep the 100k. When the blood has been spilt over the next 12 months there will be plenty of opportunities to invest some of the cash. Remember, if you repay your mortgage you will have to go back and refinance it to get it out again in the future for investment. So just keep the cash......I'd love to have 100k in cash right now


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