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Want to know exactly what you’ll get from CPP when you retire? Here’s how to find out Jul 20th
You can even get a precise estimate years in advance, thanks to a new online service that goes where the federal government won’t, writes David Aston..... More »
What investments can I put in my TFSA? + MORE Sep 14th
The less tax you pay, the more money you keep for yourself. How can you apply this to investing? By using registered investment accounts like the tax-free savings account (TFSA) and the registered retirement savings plan (RRSP). The TFSA is often the first investment account a new or young investor .... More »
Why GICs are a good addition to an RRSP or a TFSA + MORE Feb 8th
It’s tax time again, which means Canadians may be thinking about tax-smart ways to invest to reduce their tax burden next year. Chances are, you’ve seen and heard more about guaranteed investment certificates (GICs) in recent months than ever before, and there are concrete reasons why. Read on t.... More »
How women can start investing + MORE May 16th
Maybe you’re making a little more money these days and are curious about where to put it. Or maybe you’ve reached the age where you need to start, seriously, planning for retirement. Either way, we’re happy you’re here. The time for women to start investing is yesterday, or at least, right n.... More »
Making sense of the markets this week: December 10, 2023 Dec 14th
Kyle Prevost, creator of 4 Steps to a Worry-Free Retirement, Canada’s DIY retirement planning course, shares financial headlines and offers context for Canadian investors.
Interest rates stay the same—bank accounts, not so much
As was widely anticipated, the Bank of Canada (BoC) chose to k.... More »
Annuities may offer security in uncertain times
– thestar.com
Purchasing a better night’s sleep in retirement may come from buying an annuity.Should Pete sell mutual fund to pay down the mortgage?
– moneysense.ca
ShutterstockQ. I have $103,490 left on my mortgage and I pay $325 bi-weekly on it @2.89% fixed rate (mortgage is being renewed shortly). I have the ability to pay off up to 15% ($18,700) of the original mortgage annually in a lump sum without fees. Should I pull money out of my mutual funds (averaging 7% annual return) to put down a lump payment? Or, keep everything as it is? I can also pay down up to double the required bi-weekly payment without charges also, so possibly increasing the biweekly payment would be better? Any advice?
Thanks, Pete
A. Pete, this is actually a common question. People want to know where their money will be most effective. You have had a low rate on your mortgage and even with renewal, it will remain relatively low. Meanwhile, your mutual funds are earning 7%.
Related: Paying down an income property
I do not recommend withdrawing from a higher earning investment to pay down a lower cost debt. That would not be effective and there may be other fees associated with that strategy including possible deferred sales charge fees or maybe taxes (if RRSP money is involved)…
