The Money Podcast Why You Should NOT Pay Off Your Mortgage
Should you pay off your mortgage sooner? Or will paying across the original term work out better?
It's a question many ask themselves, and yet there are factors to consider. In this episode, Rob outlines five compelling reasons to reconsider mortgage repayment, including the benefits of low-interest debt, the opportunity cost of capital, and the impact of inflation on debt value.
KEY TAKEAWAYS
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Current mortgage rates are relatively low, making mortgages one of the cheapest forms of debt.
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Instead of paying off a mortgage, individuals can invest their money in higher-return assets, such as stocks or real estate, which can yield better returns than the cost of mortgage interest.
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Paying down a mortgage can lead to significant opportunity costs.
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The money used for mortgage repayments could be invested in income-generating assets, which could provide enough cash flow to cover mortgage payments
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Inflation decreases the real value of debt over time.
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As inflation rises, the cost of living increases, but fixed mortgage payments remain the same
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Mortgage companies often structure loans to front-load interest payments, meaning that in the early years, borrowers pay mostly interest rather than principal
BEST MOMENTS
"If you're paying your mortgage down, you might have an interest rate of 4%, but you could have got 11.5 to 12% in the stock market for the last 15 years."
"Inflation pushes the prices of rents up... your mortgage payments are not going up with inflation. They're going down with inflation."
"The banks know if you get a mortgage with them... you might move after three or five years. So they front load loads of interest."
VALUABLE RESOURCES
bit.ly/Robsupporter
https://money.school
ABOUT THE HOST
Rob Moore is an author of 9 business books, 5 UK bestsellers, holds 3 world records for public speaking, entrepreneur, property investor, and property educator. Author of the global bestseller “Life Leverage” Host of UK’s No.1 business podcast “The Disruptive Entrepreneur”
“If you don't risk anything, you risk everything”
CONTACT METHOD
Rob’s official website: https://robmoore.com/
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LinkedIn: https://uk.linkedin.com/in/robmoore1979