Investing vs Paying Off Your Mortgage: What’s the Best Move?

Deciding whether to invest extra cash or pay down your mortgage is a common question for many. Here’s a simplified breakdown to help you weigh your options:

Key Insights:

1. Investing Often Outperforms Paying Off the Mortgage 

• • Over the short and medium term, investing (using debt recycling) generally yields better results. Over the long term, it outperforms in all scenarios.

2. Market Volatility Matters

• • Poor timing (e.g., starting in challenging years like 1990 or 2008) can lead to initial losses, but long-term results remain positive.

3. Drip-Feeding Investments Can Help

• • Using a “dollar-cost averaging” approach—investing small amounts regularly—can reduce the impact of market volatility and improve outcomes.

4. Commitment is Key

• • If you choose to invest, stay consistent. Switching strategies after a poor start can hurt long-term gains.

5. Investing vs Mortgage: A Balanced Strategy Works Too

• • You don’t have to choose one path. For instance, if you have $100,000, consider debt recycling $75,000 while keeping $25,000 in your offset account.

6. A Calculated Risk

• • Like riding a motorbike, once you decide to invest and understand the risks, it’s a no-brainer to use tools like debt recycling for better outcomes.

Take the Next Step

Investing can be a powerful strategy, but it’s not one-size-fits-all. The right approach depends on your financial goals, risk tolerance, and long-term plans. Speak to the experts at Oreana Private Wealth today to craft a strategy tailored to you. Let’s build your future with confidence!