This recurring household debate is always a close call and there are several options to consider
It’s an age-old question and the answer can make a significant difference to your money situation over the longer term. Paying off your mortgage is a notable goal and achievement. Making the most of low-interest rates and paying off your home loan early is commendable and will give you great peace of mind. However, will you benefit once you come out the other side of the mortgage and have surplus cash to invest?
Or do you pay off the mortgage for a little longer and consider building wealth alongside the loan? At the very least, this second option is a diversification strategy – having your money grow by investing in other assets, potentially compounding with interest over several years. And as the mortgage is paid, an investment pot develops.
But putting someone else in charge of growing your money is not as easy as it sounds. Several recent studies reaffirm what we already know: Australians are emotionally attached to their money and moving it into an investment vehicle is a difficult decision.
However, what these same studies tells us is that there’s a case for homeowners to be putting money towards their home loan as well as additional investments.
In its latest Household Financial Comfort Report, ME Bank says more households are saving. It estimates savers, on average, are now putting away close to $862 a month or more than $10,000 a year, an increase of 7% from the previous biannual report in 2018. Almost half of households with a mortgage (49%) continue to pay above the minimum in repayments, the report also says.
As at December 31, 2018, 47% of households are contributing more than 30% of their income towards housing each month, and this is a nine-point fall from 56% over the previous six months.
Bu hikaye Money Magazine Australia dergisinin May 2019 sayısından alınmıştır.
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Bu hikaye Money Magazine Australia dergisinin May 2019 sayısından alınmıştır.
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