Q.
My partner and I have a combined annual income of around
$100,000. We owe $170,000 on our mortgage, and have savings of
$50,000. Would we be best to pay off our current mortgage as soon
as possible, or look at some other kind of investment with our
savings/income, such as a second property?
A.
You should be trying to minimise your non deductible debt while
maximising your deductible debt therefore you could consider paying
the $50,000 off your mortgage which will reduce it to $120,000. If
you can then make payments of $1500 a month the loan will be paid
off in 10 years. There is no need to pay it back any faster because
once you have your loan down to a 10 year term, you are better off
to focus on borrowing for investments such as shares and
property.
Each week financial advisor Noel Whittaker answers your
questions.
