• What Are The Advantages/Disadvantages Of Paying Your Home Off

    Let’s be clear, there is no exact answer.

    We are all different in personalities and goals. I guess the correct answer could be what helps you sleep better at night. Certain traits as culture, values and determination go into the great conundrum of paying your house off. I am biased in my idea of peace of mind is paying off my mortgage. Let’s begin with the pros of being mortgage free.



    Mortgages that are paid off free cash flow. For some that means more fun today, including travel and getting a new car. For others, the extra cash builds your retirement fund and helps save for the kids education.

    Tax advantage

    Canadians who pay off their mortgage completely will enjoy the PRE – the principle residence exemption. When you saw the home you occupy, there is no capital gain as long as you have been there for 12 months.

    Borrow from equity to invest

    Although a certified financial planner or accountant should be consulted, many clients take out their equity to invest aggressively in the stock market or with another purchase of a home as a rental. In most cases, interest can be deducted for the specific venture.

    You own the home

    The old saying is “the bank owns the home”. Once it’s paid off, it’s all yours.

    Give to others

    Some of our clients now have more funds to give to family, religion or charities.


    Paying the mortgage early

    many lenders charge heavy penalties when you pay the mortgage before the term


    As mentioned earlier, I enjoy peace of mind. Alternatively, your goal could be making as much money as you can.


    You sacrifice retirement as your extra cash goes to pay off the home

    Dead asset

    Once the home is paid, it is considered as a dead asset. Unless you borrow to invest and make more money, the theory goes you have a dead asset.


    There is no correct answer. We are all different in our financial perspectives. When buying a home, have a goal as to how you want to live your life to ensure you minimize your future regrets.

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