Posted onJune 03/2019
Torontonians are always looking for mortgage solutions. With so many different experts disagreeing on whether or not Canadians should pay off their mortgage before retirement it can be difficult to decide who to listen to. Mortgage renewing and refinancing are also options that homeowners in Toronto who are are seeking effective mortgage solutions will need to consider at some point. Here, we will discuss some of the pros and cons of paying off one’s mortgage before retirement.
Advantages of Paying Off Your Mortgage Before Retirement
One of the biggest advantages of paying off your mortgage before you retire is that you will have an improved cash-flow to work with for the rest of your life, as you will own your home and be debt-free. Your retirement savings will also last much longer since you will not have to dip into them in order to help pay off your mortgage.
As such, they will, quintessentially, be able to last you for as long as you need them to, which will reduce stress and worry as well for you and your loved ones. Furthermore, paying off your mortgage before retirement may also help you budget in a more effective manner before the big day actually arrives; which is something that all Canadians should try and do if financially feasible. Yet another pro to paying off your mortgage before you retire is that you will be able to enjoy a guaranteed rate of return while you are paying it off.
In sum, paying off your mortgage before you retire will mean you won’t have to worry about any debts and will be able to enjoy an increased cash flow. The chances of you losing your home will also drop significantly, and you will no longer have to make monthly payments on your home either. However, please remember that you will still need to budget properly in order to pay your property taxes, as well as any future renovation costs, homeowners insurance, utilities, and more.
Disadvantages of Paying Off Your Mortgage Before Retirement
Some possible drawbacks to paying off your mortgage before you retire include having most of your money locked up in your domicile, which will make it arduous to access in most cases. Some experts may also suggest that you shouldn’t rush into paying off your mortgage, as rates are currently quite low, which means that borrowing at the moment is also affordable. Those same experts may also argue that putting all of your eggs in one basket, which in this case would involve putting almost all of your hard earned savings into a single investment, may be unwise, should something go wrong in the foreseeable future.
You may also find yourself becoming cash poor by trying to pay off your mortgage quickly, which may deprive you of certain things that you want for several years or even decades. Moreover, any retirement contributions that are made early on may actually yield greater wealth in certain instances. If you would like to learn about more mortgage solutions in Toronto
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