Went to the TD Bank this morning to meet with the Mortgage Broker to discuss our potential renewal.
We would have a 16.00 penalty today if we early renewed now. Although we could save .567 % on the interest. Should we keep up the payments like we are , no mortgage in 4 years 21 weeks.
We could also go LOC and pay the principal anytime, but higher interest ; prime plus 2%.
Interesting factoid, was told that RRSP's are basically useless to someone if they end up with a good pension from their employer when they retire. Just because of the claw backs that the Tax man puts on it. They are very useful if one has no pension to fall back on and should the person start when they are younger. Or you stay within a smaller wage scale all your life.
So it is better for us to pay down the mortgage as quickly as possible as we are doing, than to invest in RRSP's. There is always the stock market but we went that route and lost big time on the Tech. stocks esp. Nortel. That we transferred over from Mutual's to RRSP"S. 
Also got two ballots for the TV draw. What to do , What to do???????
Tuesday, November 20, 2007
RRSP's not for everyone
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4 comments:
First question: Are mortgage interest payments tax-deductible?
No, they are not. But as the going interest rates here are 2.75-3.25 for rrsp's. and mortgage rates are betwen 6-8%. Makes more sense to pay down the debt.
Yes it does. The best thing would be to have a bank account which combines your mortgage with your current account, so you are paying it off at the maximum rate (but can increase your debt if you need the cash). I wonder if the Mermaid knows about these. She ought to.
GB- thank you , over here they do not combine the accounts like that. But we have a floating LOC at prime so if we ever need extra cash we have it.
Also have over draft if necessary on the current account. So we can double our Mortgage payments and also pay down 15% each year with no penalty.
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