So after getting a new mortgage I’ve been flirting with the idea of paying it off completely over the next five years. That way I would be completely debt free by 36 and it would also mean I only had a mortgage for a total of ten years.
On the positive side of the debate:
- Debt free has a nice ring to it, but it is also practical in the regards the freedom to change jobs since our spending drops off to under $2000 a month with no mortgage payment.
- After it is paid off I end up with a huge cash flow to invest or even spend a part of it on ourselves.
- Technically I do have the prepayment privileges to actually do this and have no penalties.
On the downside of the debate:
- I’m putting most of my cash flow to one goal. Paying off the mortgage would consume almost all of our cash extra cash flow over the next five years. Basically I would only be investing in my pension and $200 a month to RRSP’s and then all the rest to the mortgage.
- My net worth is even more tied to my house than it already is. As pointed out at various times on this blog and others that limits my options.
Then there is the other thought running around in my head. I could always do a Smith Manuveour to try and reduce those downsides. I still haven’t decided anything yet as I have to discuss the idea with my wife a bit more. So what else would you add to these lists? What would you do in my place?