The advise of promptly paying down housing loans is not always good advise especially in today's low interest climate. There are such thing as good loans and bad loans. Housing loans are considered good loans and they are the only ones that come with the lowest interest rate. Banks give low interest rates because the collateral is the property the loan is taken for.
So let's say you have study loans, car loan, renovation loan and housing loan, your priority should be to pay off the ones with the highest interest rates. And after that, if you still have money left over, you should explore investing those money for higher returns than the housing loan rate.
In my case, I took a $1m loan for my condo and the interest was slightly above 1% pa. Instead of paring down the loan, I invested the money into blue chips and reits for 5% or more returns pa. Even my
CPF OA gives 2.5%. Be nimble, not need to rush to pay off a good loan when you have one.
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Originally Posted by Unregistered
You're welcome, yep paying off the mortgage should be a primary objective. Bonuses etc should go in immediately too which would stave off temptation to spend it.I would advise to keep your mortgage to 10 - 15 years timeframe and if anything were to happen least the roof over your head is secure.
With regard to taxi drivers don't be too quick to judge, driving a cab is a noble profession and in fact many down on their luck professionals do it. When life gives you lemons make lemonade as they say. There are also drivers who are retirees who just like to chat with many people and share their life stories (no different from the millionaires and billionaires who want to do the same). I know a guy who lives in a 10 M house and drives a taxi too so there are no one size fits all. Lets respect the taxi drivers and if we (touch wood) join their ranks we would want that respect too, if my seniors or peers snigger in my cab I would gladly drop them in the middle of the PIE and leave with a smile on my face.
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