# Deleted



## Ag Driver (Dec 13, 2012)

Deleted


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## l1quidfinance (Mar 17, 2017)

Currently on track for 48. I have set a target and being moderately aggressive to pay off within 10 years. 

This is a fairly new target I set myself. Currently paying 20% of my net overtime towards the mortgage + daycare money that is no longer used. 
Of course a lot can change within 10years so I may not always be able to pay as much as I am now.

I just feel that it's important to set that target.


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## Onagoth (May 12, 2017)

My financial plan puts me on track to be mortgage free at 45. 

Right about the time the first of my three kids graduates high school.....


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## heyjude (May 16, 2009)

I bought my first home at age 33 with a large down payment and aggressively paid off my mortgage. Interest rates were over 10% at the time. I was mortgage free by age 35. Thereafter, I remained debt free until I purchased my first rental property aged 49. When I bought my present home at age 53, I took out a HELOC, which I paid off with the proceeds of sale of my previous home. I kept the HELOC open as a potential source of emergency funds but the balance is zero. Currently, at age 61, only a few small mortgages on rental properties remain. As interest on these mortgages is a tax deductible expense, there is no urgency in paying them off aggressively. In fact, ROI is better if I do not. Therefore I am paying them off steadily while keeping cash flow neutral or slightly positive. If I were to make no further prepayments, the final mortgage would disappear when I am about 70, but the payments would be quite small. However, as each mortgage is paid off, I can afford to increase the monthly payments on the remaining ones if I wish.


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## Just a Guy (Mar 27, 2012)

I was mortgage free in my late 20’s. Biggest mistake I ever made...almost lost everything once I got injured. Since then I’ve leveraged my main property to buy rentals and then paid it off when I financed the rentals, so I’ve been mortgage free lots of times since then, but not for long if a good opportunity comes along...well technically it’s a heloc, not a mortgage.


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## AltaRed (Jun 8, 2009)

Mortgage free at age 40 and that was after a couple of upsizings. Made it a primary focus to get there. Best thing I ever did for 'freedom factor'. I could pour all that newfound cash flow into the capital markets and higher personal spend. Never had a dollar of debt since.


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## pwm (Jan 19, 2012)

Bought my first house at 23. Mortgage free at 35.


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## cainvest (May 1, 2013)

Never had a mortgage, guess that really hurts my credit rating ... whatever it is ...


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## Eclectic12 (Oct 20, 2010)

Was mortgage free at 42 for about two years before buying another house. Became mortgage free again at 49.


Cheers


*PS*
I probably should mention I was late getting into a house so all years of having a mortgage adds up to fifteen years, in total.


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## OnlyMyOpinion (Sep 1, 2013)

Bought at 25, mortgage free at 30.
Have owned up to 3 single detached properties at the same time, but no mortgage or loan on them.


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## Gruff403 (Jan 30, 2019)

Probably when I'm pushing daisies. Almost had the mortgage paid off but realized had little savings. Took a HELOC during temporary job loss and used the money to buy other property, finance investments, have some fun and pay bills. Have a hard time justifying making additional mortgage payments under 3% interest when I can buy banks, pipelines and telecoms and make more. I totally believe in smart leverage to advance net worth. Cash flow is what is now important. Debt to grow assets is fine as long as cash flow can handle it. Have a buddy who paid off his mortgage quickly and then realized he has to work another decade to build up investments. He is house rich and cash flow poor.


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## Plugging Along (Jan 3, 2011)

Bought a condo with a really small mortgage, then refinanced it to buy our current house, with a mortgage, and turned the condo into the rental when we were about 31. Also bought a recreation property. So we had three mortgages that were relatively small and didn't mind as they rates were low. Then my spouse lost his job while I started my second mat leave and I was at risk of being laid off. We went really conservative, and paid off the two non rental mortgages. Paid of main mortgage at 37 and the rec at 39.


I still have mortgages for rentals, but have decided that it was better to be mortgage free.


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## AltaRed (Jun 8, 2009)

Gruff403 said:


> Probably when I'm pushing daisies. Almost had the mortgage paid off but realized had little savings. Took a HELOC during temporary job loss and used the money to buy other property, finance investments, have some fun and pay bills. Have a hard time justifying making additional mortgage payments under 3% interest when I can buy banks, pipelines and telecoms and make more. I totally believe in smart leverage to advance net worth. Cash flow is what is now important. Debt to grow assets is fine as long as cash flow can handle it. Have a buddy who paid off his mortgage quickly and then realized he has to work another decade to build up investments. He is house rich and cash flow poor.


Doesn't work out as well when interest rates jump by 2 percentage points or so. They will be 5%, i.e. in stress test range, in the not too distant future. Cheap credit has to disappear sometime. Most of us boomers know very well how debt servicing can become the shackles of one's life. There is way too much arrogance and over-confidence being expressed in a number of threads by those who leverage up assuming their current cash flow projections will continue indefinitely.


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## pwm (Jan 19, 2012)

My rate was 12% when I paid it off in 1984.


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## gardner (Feb 13, 2014)

pwm said:


> My rate was 12% when I paid it off in 1984.


I bet THAT felt like a weight off. When we bought our first house in 1990 or so, the rate was 11.25% but we rode the 6-month-open highway through all the rate drops and wound up at something like 5.5% when we finished paying it off in 2002 or so.


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## newfoundlander61 (Feb 6, 2011)

I managed mortgage free at age 47, currently 57. Not too shabby


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## Longtimeago (Aug 8, 2018)

I don't see any point in suggesting a specific age for being mortgage free. As Just A Guy points out, it all depends on why you have a mortgage. If it is to free up capital to invest otherwise, then that may make total fiscal sense. 

I think it is better to think about how something fits into your longer term goals. Someone hoping to FIRE for example should be looking to be mortgage free on their primary residence before they retire. Going into retirement at whatever age, with a mortgage, is to me a bad idea so in that sense I would say be mortgage free at whatever age you retire at.


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## OnlyMyOpinion (Sep 1, 2013)

Glad to see you've mellowed LTA. Initially you would take umbrage when someone did not answer a thread as you intended it to be answered. 
Now, you are comfortable ignoring the initial question posed and just expressing your opinion. Great to see. :encouragement:


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## Plugging Along (Jan 3, 2011)

Good points about why you are mortgage free as JAG and LTA mention. Another thing to mention is what you do with the money when you are mortgage free. Most people assume that it all gets invested. In our case, we hit our 'big milestones' in terms of net worth and being mortgage free relatively early. However, we haven't invested most of the money we were paying on the mortgage. Sure some went to investments, but a lot of it went into lifestyle inflation with our kids and family. We have chosen more expensive options such as nannies, private school, expensive trips. We choose different, lessor paying, less stressor careers too. We only were able to do this because we had no mortgage. I would still say we are on track for retirement, but what you do with being mortgage free matters.


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## latebuyer (Nov 15, 2015)

Wow i'm impressed! I didn't even buy my condo until i was 40. I would say my goal is to pay it off when i'm 56. As a single person i'd say part of my goal is to keep money liquid in case of job loss or disability. Maybe if interest rates go up a lot i'll change my mind.


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## STech (Jun 7, 2016)

Paid off the starter home at 33. Paid off the big forever home at 36. 

Yes it's a great feeling of security. But it totally feels like dead money too. I'd take out a HELOC to buy a good investment property.


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## twa2w (Mar 5, 2016)

Which time?
Bought my first house in Kapuskasing Ontario for 38,500, that was about 38 years ago. Paid off the mortgage 2 1/2years later at age 27. I think my salary at that time was likely around 14,000 a year. Sold a few months later for 40,500 to a young couple from Toronto who were moving to Kap as they felt they couldn't get ahead in Toronto.
Moved to Newmarket, cost of a house was almost double at 78,000. Took a mortgage and had it paid off within 7 years.
Sold and moved to 7 acres on Davis Drive. Had to take a mortgage and sold three years later and paid off the mortgage with the proceeds.
Moved to Kelowna and bought with no mortgage. No mortgages since.
The house in Kapuskasing is still only worth about 40,000. I feel sorry for the couple who bought it hoping to get ahead and move back to Toronto.
As LTA says a lot will depend on circumstances. A young OPP officer and a nurse can buy and pay off a house in North Bay, a lot quicker than if they live in Toronto.


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## Thal81 (Sep 5, 2017)

Bought condo at 26, was mortgage free at 33. Too bad pouring all my money into it made me miss so much of the bull market, but then again, I knew nothing about investing, I just didn't want debt. I'm 38 now and trying to catch up!


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## Eclectic12 (Oct 20, 2010)

Longtimeago said:


> I don't see any point in suggesting a specific age for being mortgage free. As Just A Guy points out, it all depends on why you have a mortgage. If it is to free up capital to invest otherwise, then that may make total fiscal sense ... Someone hoping to FIRE for example should be looking to be mortgage free on their primary residence before they retire. Going into retirement at whatever age, with a mortgage, is to me a bad idea so in that sense I would say be mortgage free at whatever age you retire at.


Surely someone who is looking to FIRE that has a manageable amount on a HELOC (similar to a mortgage) is fine?
Unless maybe they need the leveraged portfolio for regular expenses.

Or is freeing up capital to invest really one of many factors?


Cheers


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## SW20 MR2 (Dec 18, 2010)

Bought our first home at 30 and would've been mortgage free at 37, but we upsized - moreso for the location though. I'm now 41 and, if we just make basic payments, I'll be 50. I'm sure we'll make some lump sum payments over the years, so my guess is that we'll be free in 6-7 years. Not ideal, but we're not house poor either and still invest, including maxing out RRSPs and TFSAs.


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## Earl (Apr 5, 2016)

About 300k remaining on my mortgage (on a house worth probably about 500k) which I expect to pay off in about 10 years, when I'll be in my mid 40s. However my plan is to move to a much cheaper area when I retire (nova scotia or new brunswick maybe) so that should provide me with lots of extra money. Money.


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## Longtimeago (Aug 8, 2018)

Eclectic12 said:


> Surely someone who is looking to FIRE that has a manageable amount on a HELOC (similar to a mortgage) is fine?
> Unless maybe they need the leveraged portfolio for regular expenses.
> 
> Or is freeing up capital to invest really one of many factors?
> ...


People see things in different ways Eclectic12. From my perspective, too many people who talk about FIRE, sail too close to the wind. For example, I do not believe in SWR which a majority of those talking about FIRE intend to depend on. I keep pointing out how many early retirees doing so found themselves going back to work with the Great Recession of 2008-9. It wasn't because their SWR plan wouldn't survive the longer term but because they suddenly found that their 4% SWR on a reduced capital would not be enough to live on. 

So their choice was to trust their SWR plan would survive while they withdrew say 8% from their diminished capital in the meantime. Many looked at that proposition and 'choked'. They could not stick to their 4% SWR because their expenses are a hard number, not a static percentage of income. Now that happened to people with NO debt whatsoever, having a mortgage or HELOC or any other kind of debt simply would have made the picture even worse for them.

I've written several times about my belief in the Rule of 3s. Live on 1/3, 1/3 for disposable, 1/3 for saving/investing. But what many who FIRE do is live on much more than 1/3 of income from SWR. They do so because to get significantly more income at 4%, they have to have far more capital when they retire. So consider some simple numbers.

If you see your capital suddenly drop from $100 to $56(October 07 to March 09), what happens with a 4% SWR? While you were able to live quite comfortably and have money left over when your 4% was getting you $4, how would you fare if you stick to 4% when the capital dropped to $56 and the 4% then meant an income of only $2.24? Suddenly your income is basically halved. So if your living costs were 1/3 of your initial income of $4 (4/3) = $1.33, you could manage still. But in fact it is more likely that most people depending on SWR are sailing closer to the wind and perhaps had living expenses of $2+ Then what do they do? Live on pot noodles or go back to work? 

So, the less cushion you have, the greater the risk that you will act not as the 'numbers' say you could but as FEAR makes you do. People are not computers, they have emotions which influence their actions. Anything that impacts your numbers in a negative way when bad times rear their head, will contribute to your emotional decision. Having a debt to service is a negative in that sense, regardless of why you incurred the debt. 

Here is a pretty simple explanation by someone who believes in SWR of how in fact the Great Recession was survivable but at the same time, it explains Sequence of Return Risk which is what is important. https://www.madfientist.com/safe-withdrawal-rate/

There is no use telling someone they can withdraw 4% when 4% is no longer enough to live on and they have to either withdraw more than 4% to live on or go back to work. Here is the really relevant comment in the article, "Therefore, if your first decade of retirement goes smoothly, you’ll likely end up with a lot of money leftover when you die (or you can increase your spending during retirement). If your first decade isn’t great and you deplete a big chunk of your portfolio early on, you may be in trouble."

What all SWR arguments do is focus on the numbers. Most give no consideration or very little to just how close to the wind most people are sailing and never give any consideration to human nature. They talk about having say an income of $100 but do not say anything about how much of that income is being used for living costs vs. disposable income. How much cushion there is. They talk about how the 4% SWR will survive as LONG as you do not need to deplete the capital early on, but do not talk about how a human behaves under stress.

Any debt in retirement can only add to stress in bad times, while no dedt is at worst neutral in terms of your decision making. I prefer to eliminate as many factors as possible that could have a negative impact on my decisions. Therefore I want no debt and as high a percentage cushion as possible.


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## OnlyMyOpinion (Sep 1, 2013)

LTA, if you've answered this before I missed it and apologize for asking again:
Under your 1/3 x 3 retirement plan, is the 1/3 saving intended as a buffer for unplanned expenses? Have you found that you have tapped into it over the years and it has stayed a modest size? If it has grown, then what are your intentions for it?


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## Longtimeago (Aug 8, 2018)

OnlyMyOpinion said:


> LTA, if you've answered this before I missed it and apologize for asking again:
> Under your 1/3 x 3 retirement plan, is the 1/3 saving intended as a buffer for unplanned expenses? Have you found that you have tapped into it over the years and it has stayed a modest size? If it has grown, then what are your intentions for it?



The basic idea is simple OnlyMyOpinion. Spend less than you earn. I use the Rule of 3s as a simple guideline. It isn't carved in stone. As I explained on another thread, with a 2/3rds cushion you are practically bullet proof. 

Suppose you have $100k income. You try to keep expected annual expenses to around $33K. You then have $33k for discretionary spending and another $33k for saving/investing. Then one year, you plan to spend $30k on travel while at the same time, you find you need to put a new roof on your house or re-pave your driveway as we are doing this year at a cost of around $25k. Obviously both the travel and driveway would come under discretionary spending since your $33k living cost budget does not cover either of them. The choice might be to give up or reduce the travel to pay for the driveway out of your $33k discretionary spending budget. Or you can do both and use $23k out of your savings/investing $33k leaving you with $10k to save/invest. 

So in short, strictly speaking, the 1/3 discretionary spending budget is intended for 'unplanned expenses' but there is nothing to stop you from tapping into the 1/3 savings/investing budget as well if necessary. What you don't want to see is that you are doing that too frequently, which would tell you that in fact, your kidding yourself about trying to save/invest and are really just doing a lot more discretionary spending than you have budgeted for. For example, if you are averaging $50k per year on travel, then obviously you aren't staying within the $33k discretionary budget at all.

I'm not quite sure what you mean by what do I intend for the 1/3 savings/investment portion. I thought saving/investing was clear enough. It can be tapped into as per the above example, the idea is not to die fulfilling the phrase, 'he who dies with the most money wins'. But there is a fine line between 'tapping in' and 'depending on'. If your everyday living expenses and your discretionary spending start creeping up to the point where no year sees 1/3 of income free to save/invest, then as I say, you are just kidding yourself. If you meant what 'final disposition' do I intend for when I die, that's just up to the individual to decide in writing their Will.

Unfortunately OnlyMyOpinion, many people don't earn enough in retirement to even consider the Rule of 3s. It's pretty hard to do on an income of say $30k per year. Most people probably live on 50-75% of their annual income earned. That leaves them with a far smaller cushion obviously. That doesn't mean they can't enjoy a trouble free retirement but it increases the odds of them having a problem as well obviously.

Every individual will differ in their circumstances. For example, my wife and I have some income derived from another country and so are subject to currency exchange fluctuations. We have seen those fluctuations be as much as 25% in the last 10 years. Imagine a 25% fluctuation in a large portion of your income and what it could do to your retirement. We notice it and aren't happy about it but with a 2/3rds cushion, it does not change anything in terms of what we spend money on. It just means we save less in a bad year and more in a good year. As I said, the Rule of 3s is not carved in stone, it is simply intended as a guideline that allows you to have a very healthy cushion to deal with any kind of financial 'blips'.

If someone's living costs, meaning needs that cannot be avoided, are 80-90% of their income, then any 'blip' becomes a major problem. The basic idea of the Rule of 3s is simply about avoiding ever having a 'blip' be a major problem. 

Most people looking at retirement have a rough number in mind that they believe they need to live on. Most overestimate that number because they do not really realize the difference between needs and wants. They also 'can't see there from here' (a phrase I like a lot) in that what you spend money on when working may well disappear when you retire. Take a simple example like someone who stops to buy a Timmy's coffee at the drive-through every day on their way to work. That person says, 'I can't possibly manage on less than $70k per year but without thinking about it, they have included that morning coffee. 

A medium coffee from Timmy's right now is apparently $1.57 (I had to look it up). That's $1.57 x 300 (working days) = $471 per year! It's also just one example of how people 'can't see there from here.' There are all kinds of other things people spend money on every day that can and should change when they retire. My cellphone for example costs me $100 per year, yes, per year. People spend that much per month on their cellphones as a necessity when working. That's a difference then of $1100 per year in living costs.

I guess I've rambled a bit but perhaps in all of that, you find the answer to the question you asked and why you asked it.


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## Longtimeago (Aug 8, 2018)

Just as an aside, the Rule of 3s is one that can be applied in many different ways. I first came across it as a rule for packing for travel.

When someone packs a bag to go to a beach for 2 weeks and are going to be staying in one hotel, they have no real major constraints on what they pack. But if someone travels for an extended period of time to various locations, packing becomes more of a problem for MOST people. How many pair of underwear do you pack for a 3 month trip? Or if you are going to be doing a lot of walking with your bag, how heavy can it be without you becoming quite uncomfortable schlepping it?

The Rule of 3s for packing is again, simple. You pack, 'one to wear, one to wash, one to spare.' If you follow that rule, you have no problem with a trip of any length of time. It acknowledges that you cannot really expect to pack 90 pair of underwear and never have to wash anything, not if you want to be able to pick up your bag when necessary and not need some Sherpa porters to carry everything for you.

A lot of people will say they 'pack light' when they travel. Light in packing for travel, for me, means a bag (including the weight of the bag itself) that weighs under 8 kg. Try telling most people they can do that too. It's like trying to tell people they can live on less in retirement. Back to, they 'can't see there from here'. :cocksure:


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## BoringInvestor (Sep 12, 2013)

Going back to the OP, (though I couldn't care less what O'Leary says, as I don't regard him as an expert on most matters), I'm aiming to have my mortgage paid off by the time I'm 45. 

We bought in our home in our mid-20s, (we're in our mid-30s now) and we're looking to have it paid off in <10 years.

So far we've hacked away at 50% of the initial total, so it feels nice when we hit the point where we 'owned' more of our house than the bank.


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## CPA Candidate (Dec 15, 2013)

I could pay off my mortgage by selling off a portion of my unregistered portfolio; but I wouldn't regard it as the best use of funds. The after tax return is only 2.67%. For comparison, my marginal tax rate on eligible dividends is 20.5%, so a stock yielding 5% per year would return of about 4% after tax.

Now one could say, quite correctly, that the stock can decline in value and post a negative return over a year. However, it is not likely to post an overall decline over the remaining period of the mortgage (11 years). And this simple analysis does not take into account dividend growth.

Some people have a psychological need to pay off debt, and that's fine, but one should really consult with the numbers before making these kinds of decisions. I have zero doubt that my portfolio of unregistered stocks will outperform the returns from extinguishing my mortgage today over the period of a decade.


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## Mookie (Feb 29, 2012)

My wife and I paid off our condo mortgage when I was 29, our first house when I was 34, and our current house when I was 38.

Shortly after paying off our current house, we opened a HELOC, and used it to invest. I’m currently 50, and we’ll have the HELOC paid off by the time I retire at age 55.


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## Ag Driver (Dec 13, 2012)

Deleted


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## Eclectic12 (Oct 20, 2010)

Mookie said:


> .... Shortly after paying off our current house, we opened a HELOC, and used it to invest. I’m currently 50, and we’ll have the HELOC paid off by the time I retire at age 55.


Whereas I had a mortgage that came with a HELOC, bought several stocks in late 2008/early 2009, taking the interest tax deduction and maxing out the mortgage early payment options to retire the mortgage early. I haven't really worried about paying down the HELOC all that much as the interest deduction is useful against employment income.

With dividend/distribution income growing, I'm not too concerned if I have the HELOC with some on it left, when I retire.


Cheers


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## Forebiz (May 31, 2018)

Purchased first house with mortgage at 21 and paid it off at 27. Kept and rented first house while buying bigger better second house at 31 using HELOC. Considered second house paid for at 35 years old, sold rental at 38.

I've always been afraid of debt and it took me until about 35 to appreciate that not all debt is bad. Always consider investing rather then lump summing down on your mortgage or low interest debt. If you are debating lump summing a mortgage or investing the money instead you are already in a better position then a large majority out there and either decision is a good one.


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## Mookie (Feb 29, 2012)

Eclectic12 said:


> Whereas I had a mortgage that came with a HELOC, bought several stocks in late 2008/early 2009, taking the interest tax deduction and maxing out the mortgage early payment options to retire the mortgage early. I haven't really worried about paying down the HELOC all that much as the interest deduction is useful against employment income.
> 
> With dividend/distribution income growing, I'm not too concerned if I have the HELOC with some on it left, when I retire.
> 
> ...


Yes, your approach definitely makes sense, and in our case we have also done better overall with the HELOC debt for investing than we would have without it. There is a reasonable chance that we would be better off in retirement as well if we kept the HELOC debt for investing, but my wife and I just want to de-risk our portfolio a little before retirement.


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## Eclectic12 (Oct 20, 2010)

I'm a big fan of doing what helps one be comfortable/sleep at night. :biggrin:

I'm also aiming to cut back on the HELOC to lower levels to open the door for drops like this past Dec as well as provide more cushion as there won't be the same ability to deal with any setbacks that employment income currently provides.


Cheers


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## hfp75 (Mar 15, 2018)

Well I bought my first house in 2004 (295K) and sold it in 2014 (520K), my wife bought her townhouse in 2002 (140K) and sold it in 2014 (340k) too. We bought our first house together 2014 (married that yr) for 785K and had a 100K mortgage. Our mortgage sits at 42,000 right now and I dont want to renew it this fall. I am 43 and want to be debt free this fall.

Lord willing it all plays as planned ! 

I have been thinking/toying with the idea of borrowing 50k-150k off the HELOC to invest, BUT markets are high and I think when the next crash happens it will make sense. How much depends on the economy and my feelings at the time. A 50K borrow off the HELOC for the SP500 seems ok to me might just to 100K... but like I said, I want the markets to drop before I do it..... we are again at all time highs (almost) and investing borrowed money right now seems stupid....

I also would consider buying a 2 bedroom/bath condo close to our (Calgary) University / College / SAIT (trade school). Our Calgary condo market is in the dumps right now, thing is, I dont see it thriving over the next few years so there is no rush to buy a rental... I think I will bide my time with just saving cash.




Eclectic12 said:


> I'm a big fan of doing what helps one be comfortable/sleep at night. :biggrin:
> 
> Cheers


I couldn't agree more !!!!!!!!!

:sleeping:


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## Calgary_Girl (Apr 20, 2011)

The first time we were mortgage free, I was 27 and hubby was 29. We upsized a few years later and just recently paid off the mortgage at 46 and 48. We could have been mortgage free sooner but we decided to invest instead since our interest rate was low.


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