Money magazine Comments - Ask Paul: Should I buy another rental or pay off debt?

Comment by Nicholas Benson ()

Nicholas Benson () — Wed, 05 May 2021 17:35:20 +1000

If he owes $380,000 he obviously doesn't own the house he lives in. To own it he would owe zero ! People who say they are home owners and owe money on a mortgage are home BUYERS!

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Comment by John Welsh ()

John Welsh () — Thu, 06 May 2021 12:15:24 +1000

Debt =House $380000 so if $120000 is tax free I would Use $100000 to reduce my home loan and keep $20000 as a buffer for the rental for repairs when property is not rented

The more u can knock the debt on you home down the better you may get a bad illness or lose your work .If u own your home you will always have a roof over your head that you can't lose

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Comment by Freddy Frederickson ()

Freddy Frederickson () — Fri, 07 May 2021 12:05:31 +1000

Well, Nicholas, he may not own the house outright but his name is on the title therefore he is the owner. The fact that the bank has an encumbrance on the house is neither here nor there. A buyer, by definition, is somebody who is intending to buy, or in the process of buying, not somebody who already has a house.

So let's uncouple the pedant wagon shall we.

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Comment by Lincoln Sheppard ()

Lincoln Sheppard () — Mon, 10 May 2021 20:04:10 +1000

Well said Freddy

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Comment by Claudia O ()

Claudia O () — Tue, 08 Jun 2021 18:08:51 +1000

Here having a mortgage for your home is partially tax deducted so I see no interest on paying faster a 2.7%.

More interesting is to search a small rental propriety where the rent covers the new rate and keep that 120k.

I might push the 120K in a Vanguard fund...the raise is around 7% per year

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