Insights + Resources

Interest Rates and Your Mortgage

Nov 20, 2020

With the Federal Reserve keeping interest rates at or near zero, you may wonder about your mortgage. Is it a good time to refinance or even pay off the debt entirely? After all, your mortgage is one of the biggest expenses you may have in life, so why not rid yourself of that debt as soon as possible?

Not so fast. There are many reasons why keeping your mortgage could be a better option than paying it off. Yes, you may eliminate one of the largest bills you have every month, but there are benefits to maintaining your mortgage as well.

  1. Losing all your gains on your investments. Using funds from your investments to pay off your mortgage early may mean you lose out on potential gains. However, by keeping your portfolio untouched, you increase the chances of a return on your investment.2
  2. Not having funds available for other debt. Your mortgage very likely has the lowest interest rate of all your debt. Consider paying off your other consumer debts or student loans with higher interest rates before you consider paying off your mortgage.2
  3. Losing your tax deductions. Home loan interest can be taken as a tax deduction. However, paying off your mortgage may mean your taxes could be higher.2
  4. Risking changes to your home’s value. If you own your house outright and there’s a sudden shift in the market, your home may be worth less than what you initially paid. Conversely, if you own 20% of your home, and the mortgage company or bank owns 80%, your losses are capped at 20%.2

Are you considering paying off your home loan or another large debt? Let’s talk about how to best leverage your investments to help meet all your long-term goals.

For additional insights and resources, be sure to sign up for our Weekly Market Commentary, follow our YouTube channel where we regularly post our Epic Market Minute videos, follow us on LinkedIn, or like us on Facebook. And as always, please don’t hesitate to reach out to a dedicated service professional at Epic Capital.

Tags: , , , , , , ,

More Insights

Apr 17, 2024

Following Iran’s missile and drone strikes on Israel over the weekend and the apparent escalation likely in any Israeli response, stocks fell sharply during Monday’s trading session. We examine the latest developments in the Middle East conflict, how stocks have reacted historically to geopolitical events, and the possible impact on markets moving forward.

Apr 15, 2024

Did you buy U.S. Savings Bonds decades ago? Or did your parents or grandparents purchase them for you? If they’re collecting dust in a drawer, you may want to take a look at them to see if any of your bonds have matured. If your bonds have matured, that means they are no longer earning … Continue reading “How US Savings Bonds Work”

Apr 12, 2024

In baseball, three strikes and you’re out. With inflation, a third straight month of hotter-than-expected consumer inflation data nearly ruled out probabilities for a June rate cut yesterday (now less than a 25% chance, according to fed funds futures). The core Consumer Price Index (CPI) rose 0.4% in March, or 3.8% when compared on a … Continue reading “Market Update – Assessing the Prospect for a Pullback”

Apr 10, 2024

You know how important it is to plan for your retirement, but where do you begin? One of your first steps should be to estimate how much income you’ll need to fund your retirement. That’s not as easy as it sounds, because retirement planning is not an exact science. Your specific needs depend on your … Continue reading “Estimating Your Retirement Income Needs”

Apr 8, 2024

Let’s talk seasonality. For those that are unfamiliar, seasonality is the tendency for markets to perform better during some calendar periods and worse during others in a somewhat predictable way. One of the more amazing things about 2023 and part of the first quarter of 2024 is how well U.S. equity markets have been following … Continue reading “Can Pre-Election Market Trends Survive This Attention?”

Insights + Resources >