โ ๏ธ Attention Homeowners and Future Homebuyers: Ever found yourself stuck at the crossroads of making one of the biggest financial decisions of your life: Should you overpay your mortgage or should you invest that extra money elsewhere? Well, you’re not alone! This is a dilemma that many of us face, and the stakes are high. Making the wrong choice could literally cost you thousands of dollars.
Join me on Patreon for more exclusive content โบ
Check out the Sequel to this video, If youโd have a 3% rate:
๐ About This Video:
Today, we dive deep into the controversial topic of whether it’s more beneficial to Overpay Mortgage or Invest that extra money. You won’t believe what the numbers reveal. And no, this isn’t some clickbait video that leaves you hanging. I crunched the numbers and broke down the pros and cons of each side, so you can make an informed decision. So let’s answer the burning question: “Invest or Pay Off Mortgage: What’s REALLY the Best Choice?”
๐ฅ Watch this Video Next:
STUFF I RECOMMEND!*
๐ค Webull App – get FREE stocks when you get started (limited time) โบ
๐ The Ultimate Transaction Register – track your budget the real way โบ
๐ฐ Seeking Alpha – get the best research tools to stay ahead in your stock and ETF research. Receive 50% off on a Premium Membership โบ
๐ฐ Track Your Dividends โบ
Join me on Patreon for more exclusive content โบ
๐ณ Apply for an American Express Card with this link. We can both get rewarded if you’re approved โบ
๐งฎ Key Takeaways:
1๏ธโฃ We look at different mortgage scenarios, with a focus on the current 30-year fixed mortgage interest rate of 7.18% in America.
2๏ธโฃ We run numbers based on a mortgage amount of $300,000 and the possibility of paying an extra $200 per month on that mortgage.
3๏ธโฃ We compare what happens if you take that extra $200 and invest it in the stock market instead, assuming a 7% rate of return.
4๏ธโฃ We dive into the long-term consequences, exploring both scenarios until the year 2053.
5๏ธโฃ And finally, we expose a critical factor that most people miss in this debate, one that could change the game entirely for you.
๐ What’s Inside:
00:00 – Introduction and Background Research
00:17 – The Rising 30-year Mortgage Rates
00:28 – Setting Up the Calculation
00:41 – The Shocking Results
01:01 – Crunching the Numbers
02:07 – The Two Scenarios: Overpaying Mortgage Vs Investing
02:21 – The Financial Gain in Both Cases
02:43 – A Critical Factor You’ve Overlooked
03:12 – What Happens in 2053?
03:42 – Accounting for Inflation
04:09 – The Power of Financial Freedom
05:51 – Pro-Mortgage Vs Pro-Investment: Pros and Cons
09:07 – FIRE
10:52 – Compound Interest
๐ Links & Resources:
Article on Historical Mortgage Rates:
Investment Calculator:
๐ Don’t forget to SUBSCRIBE and turn on notifications so you never miss out on valuable insights! ๐
๐ If you find this video helpful, make sure to hit the ‘LIKE’ button and share it with someone who needs to see this. Your engagement helps others find this resourceful content.
๐ฌ Let’s keep the conversation going! What’s your take on this debate? Do you lean more towards overpaying your mortgage, or do you think investing is the better route? Share your thoughts in the comments section below!
#OverpayMortgage #InvestorPayOffMortgage #FinancialFreedom
๐ Get Ready to Take Control of Your Financial Future!
Thank you for watching, and I’ll see you in the next video! ๐
*Disclaimer: Bob is not a financial advisor. Please contact a professional financial advisor prior to making any decisions. Some of the links and other products that appear on this video are from companies in which Bob Sharpe earns an affiliate commission or referral bonus. Bob Sharpe is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available.
TAX deductible interest. It's a great consideration that we are having here in the comment section. But since 2017, your mortgage interest may not really be helping your taxes! Learn more in the latest video: https://www.youtube.com/watch?v=5WaeQsid6yY
You have to have a job and income to refinance. So if you lose your job and need that loan the bank will deny you without a job and proof of income.
This only works for people who live in the house for 30 years or even 23 years, which a lot of people don't.
That's great point ! gracias from sydney australia
In Australia, we do not have the luxury of 30 year fixed rate mortgages. People have gone from 1% fixed to 6% variable interest rates… and house payments have gone from $2,000 a month to $6,000 a month. Interest payments are NOT tax deductible unless it is an investment property to rent out to people. Imagine if those people invested in the stock market and it crashed…and on top of that they now have a $6000 a month house payment. Add to that that the rental market is overpriced..due to the fact that our treasonous govt, bring in 800,000 immigrants each year and only build 150,000 homes, in a country of 27 million people. . It feels like a big ponzi scheme. The baby boomers are fine as they were born at the right time in history to profit from MASSIVE booming prices and record low interest rates. The rest of us are screwed.
LET ME MAKE IT SIMPLE FOR YOUR VIEWERS –
IF YOUR MORTGAGE RATE OF INTEREST IS OVER 5.5% – PAY IT OFF. IF ITS UNDER, THEN INVEST.
IF YOU INVEST IN COVERED CALL INCOME ETFS, YOU WILL MAKE ENOUGH TO COVER YOUR MORTGAGE.
(RAMSEY IS A FUCKING TOOL)
Problem, is that the total mortgage payment that includes the escrow for taxes and insurance, if so you will still have those expenses.
Paying off 2.5% Mortgage was a really bad decision(financially speaking). I'd never take financial advice from the person who made such a rookie mistake.
Paying 7% mortgage is a different story…
do this spreadsheet with my 3.75% mortgage and let me know how it works out.
We are back down to 5% in alberta Canada atkeast
Once the mortgage was paid off I could sleep at night, good times and bad.
Thanks for sharing Bob ๐ Congratulations on being mortgage free ๐ I searched early mortgage payoff journey 2024 and your video came up in the results ๐ I was doing this for Kate Kaden here on YouTube as I like to support her early mortgage payoff journey. Kate has a brilliant channel full of budgeting, frugal living and minimalism and is actively paying down her mortgage early. As a single Mum of one Kaden, hence the channel name, I think Kate is a wonderful woman and has already paid down 5 years in a 2 year timeframe so on her way to be where you are. If you have the time please visit Kate's channel and say I sent you please! ๐ I'm going to share the link to this one with Kate ๐ Peace of mind rocks ๐ 28/02/24
Talk about criminal, the interest is more than what the house originally cost.
Curious! ๐
How do mortgage rates compare to investment returns ๐ค๐ฌ is that thr tight question ???!?๐๐ ๐ฎ
Not to mention that you end up w 100% of your asset 7 years earlier.
how does this math work if your mortgage interest rate is only 3% vs the 7% investment rate
239k PLUS THE INTEREST SAVED ON THE MORTGAGE. Theyโre up almost $400k.
Lots of moot points here but still a good video
51 years old. 700K home paid off, peace of mind, I owe nothing to anybody. I am my own bank should I choose to be.
Your monthly payment includes Principal, Interest, Taxes and Insurance (PITI), not all of that goes away when the home is paid off.
You're not calculating the time value of money. If you increase the $200 investment yearly, based on inflation, you'll have invested 50% more over the 30 years and have crushed the early pay off of the house. The house payment will not change, and 30 years from now your home payment will be VERY low compared to your income.
Time value of money- don't forget it!
Owning a multi-family at 3.1% sure is great!
If you're going to include inflation you have to also include that the interest payments will be lower in real dollar terms.