/biz/ - Business & Finance

cringe

>>23103628
God forbid anyone talk about something other than a fake internet invisible fantasy currency called SUSHI with zero intrinsic value

>>23103592
As a home owner I would pay off the mortgage. rent cucks will tell you to invest that 200k into the stock market at the top of a 10 year bull run. You gains are hypotherical, while you debt is very real. Pay off the mortgage and your life will be basically stress free

Depends on a few factors. I think the overall answer though is no.
I've been looking into buying a supercar recently and mostly people who buy them ive found out are wealthy and could pay in cash buy get them on finance instead. I don't think a mortgage is any different. The argument is that if you can get he money to make more as an investment than the interest on the loan its worth investing the money.
Interest rates at the moment at least in the UK are so low that's not hard. My mortgage interest rate is 1.9% so its actually worth me putting that 200k into an investment than paying it to the bank

>>23103695
but you arent really paying that 200k to the bank. You are paying it to yourself as you will own the 500k house out right.

>>23103745
Yes but the money is locked up in the house and doing nothing where as if you have it working for you then its a nett positive over the mortgage.

Its a very easy calculation imo, its basically mortgage interest rate versus how much you could make investing.

In my example there's numerous funds which guarantee more than a 4% return so its actually way more in my best interest to invest than pay off the mortgage.

As the other anon said though its hypothetical gains rather than real mortgage payments but everything is hypothetical these days. Personally if youre risk averse do both, pay off half the mortgage and put half into investments. That way you get the best of both worlds. Lower mortgage payments but you're also making money with your money rather than it being tied up in a house.

>>23103592
>save thousands in interest payments
you have to think about the cost of having 200k earning you nothing, as long as you can make 2-3% percentage points more than the interest you are leaving money on the table by paying off the mortgage
just put in an excel spreadsheet

200k growing at 5% vs difference in monthly- interest payments growing at 5 %

>>23104173
You're thinking about it all wrong. Say your mortgage is 2000 a month, you pay it off now its zero. So your earning power increases by 24,000 a year immediately AND you have 500k in home equity

>>23104493
No, you're thinking about it wrong.
Ignoring the fact that if you have no mortgage most people will flitter away most of that extra 2k rather than investing it.

Say you could make 6% on investments.

6% of 200k is $12,000 so end of year 1 you have 212,000

Or you have 24k and earn 6% on that. End of year 1 you have $25,440.

Compound these for 10 years and its a no brainer, the more money you have to start with the higher the investment return.

As long as your return is higher than the interest on your mortgage it pays to invest

>>23104968
You are making poor assumptions. I would rather have a house paid for in full and have the freedom to dollar cost average 24k a year into the markets, instead of dumping in 200k at all time highs.

You are also leaving interest out in your calculations. 6% of 200k would really be more like 3% of 200k to account for interest payments that you pay towards the mortgage.

>>23104032
Where is a fund that guarantees 4% dividend and also doesn’t risk loss in capital investment?

>>23105062
exactly. No such fund exists. Maybe a vanguard life strategy or something but dividends are more like 3%

>>23103592
Renting is better than both options though, right?

>>23105111
No. Renting will always be the worst option unless you are completely priced out of buying and you don't want to be a fag living at your mommies house

>>23105035
I'll be honest, you asked for an opinion, you got one, and you're spending all your time arguing against it.
You are clearly entrenched in your view so why bother asking the question? You've been given plenty of examples of how investing is the better option but you don't seem interested so I'll end this chat here.

Id pay it off tbqh

>>23103684
Yep and the gains you make in the stock market aren’t guaranteed. The interest rate you pay on your debt is guaranteed.

If it was me I would ikd pay off my house and then sale my house and snowball that into a nicer house with the same mortgage.

There is no debate, investment of the leverage is optimal if all you care about is yield. Cash flows cost money which is why pure equity stock yield more than dividend. Dollar cost averaging is also proven to yield less than lump sum. If you're older and have no appetite for risk then pay off the house but the math is against you

>>23105302
>>23103592
>room temperature iq boomer

>>23105633
>t. faggot grown man living at mommies house

>>23105647
>t. assmad he can't understand the world around him
i mean i could be living on campus at my public ivy school (fullride btw) but i would rather live with mommy and not contract the wuflu.

>>23105574
Historical performance does not guarantee results, if we use the historical data then yes it’s true but it basically boils down to do you prefer the freedom from stress of having a mortgage or would you rather make more money.

Honestly I’d rather have the security myself of not having a mortgage so if I lose my job I can just be a neet

This really depends on what kind of interest rate fixing you have with the bank. If you can fix a 30-year mortage on 1% interest then yes I think it may be better to invest your money elsewhere assuming you are guaranteed a reasonable gain and don't take on much risk. However, if the rate is variable on a 3-month basis or something and you can't get a better deal you better pay that mortgage off ASAP IMO.

>>23105768
Ok but in my personal opinion you are doing yourself a disservice by being that risk adverse. Life is either a daring adventure or nothing at all

>>23105738
>believeing covid is real
anon...

>>23103592
If a person can outpace the interest rate by investing their lump of cash somewhere else, they should not pay off the house in full

>>23105900
stonks are risky. Paying off mortgage is zero risk with very big upside

>>23103592
Michigan here. Paying off early means losing a tax advantage that’s more than the payment so will keep mortgage going as long as poss

>>23105845
>Financial risk is the only thing between me and a boring risk free life

Get back in your cage, wagie

>>23103592 (OP)

its really simple.

If you believe you will have consistent income to pay mortgage, then its better to invest in stock market on average.

if you believe you may not have consistent income or retire or some shit, then its better to payoff mortgage.

basically debt fucks you if you can't pay it. if you can pay it, then it helps you

>>23107526
and the reason for this is you will be forced to sell at lows when you dont have income to pay debt. but if you confident in income, you dont have to sell/pay interest/late fees

>>23103592
Yeah I would. Anything you gotta pay for is a drain. I’d rather take a fat L now than be a slave for years and years.