Looking to invest? Pay down your mortgage instead
In a volatile market, a mortgage is a safe investment with a guaranteed rate of return.
Recent reports have shown that fewer Canadians are taking advantage of their RRSPs, leaving the country's unused contribution room at $500 billion. Additionally, a recent survey conducted by one of the major Canadian banks reveals that the majority of Canadians are listing eliminating debt as their priority for 2013. In this piece from CBC news, it is suggested that with today's low rate of return on RRSPs, paying down a mortgage is a more prudent way to invest.
Despite talk that mortgage rates are set to rise in 2013, they still remain at a level low enough that gives home owners the opportunity to contribute more towards the principal and less interest with every payment. By utilizing additional methods such as accelerating mortgage payments or making lump sum payments, many Canadians are reducing their mortgages and building equity at a much faster rate. According to a report released in the spring by the Canadian Association of Accredited Mortgage Professionals, 83% of Canadians have at least 25% equity in their home. Try using an online mortgage calculator or contacting an Ottawa Mortgage Broker to find out what small changes can be made to build equity faster.