REVscene Automotive Forum - View Single Post - You inherit a tidy sum of money. What do you invest in?

lowside67 · 11-19-2020, 09:52 AM

With mortgage rates as low as they are, it doesn't make sense to put ANY of it on the mortgage.

If you have TFSA or RRSP contribution room available, that is a no brainer, although in which order and how much/when (in the RRSP case) is worth some analysis as it's quite individual.

If I was out of registered contribution room availability (including 2021 for both TFSA and RRSP), then I'd think long and hard about mortgage vs non-registered. In the long run, I am confident that the after-tax return in the market will outweigh the interest, but it's at least closer and if you are a risk-adverse person, you might sleep better paying down mortgage.

But if it's TFSA/RRSP versus pay down mortgage, it's a no brainer.

-Mark

EDIT - I see I posted this exact same thing on page 1 in May 2019, while this was true then, with how much lower mortgage rates are now, the answer is now even more obviously cut and dry than it was then.

11-19-2020, 09:52 AM	#36
lowside67 Old School RS Join Date: May 2004 Location: Port Moody Posts: 4,641 Thanked 4,157 Times in 1,262 Posts Failed 130 Times in 80 Posts	With mortgage rates as low as they are, it doesn't make sense to put ANY of it on the mortgage. If you have TFSA or RRSP contribution room available, that is a no brainer, although in which order and how much/when (in the RRSP case) is worth some analysis as it's quite individual. If I was out of registered contribution room availability (including 2021 for both TFSA and RRSP), then I'd think long and hard about mortgage vs non-registered. In the long run, I am confident that the after-tax return in the market will outweigh the interest, but it's at least closer and if you are a risk-adverse person, you might sleep better paying down mortgage. But if it's TFSA/RRSP versus pay down mortgage, it's a no brainer. -Mark EDIT - I see I posted this exact same thing on page 1 in May 2019, while this was true then, with how much lower mortgage rates are now, the answer is now even more obviously cut and dry than it was then. __________________ I'm old now - boring street cars and sweet race cars.