I see everyone has this question. So to start off, I am in Canada, where my home equity loan interest is tax deductible but not my mortgage interest. Also, in 5 more years, December 2028 to be exact, we will renew our interest rate on our mortgage, so if interest rates go up to 10%, the best we get might be 8.75% or thereabouts.
Currently have $72,916 outstanding on a mortgage, with a 5.64% interest rate.
Also have $50,916 out on the home equity loan with 7.8% interest. payment is currently at $363.09 per month. We only have to pay the interest, which is tax deductible.
And, while we're at it, we also own a rental house, with a mortgage of $96,765.41 at 4.125% -this one is in US dollars.
Someone mentioned paying off at the beginning of the mortgage is more advantageous, and I'd really like to know more about that. Right now the break down of the two mortgages are:
for the $72,916 @5.64%: $1200 per month, $353.39 to interest, the rest, $846.61 to principal. No escrow with this one.
and for the $96,765 @ 4.125%: $1232.62 per month, $543.43 to escrow, $354.09 to principal, and $335.07 to interest.
I'm still making fine tuning my budget but I'd say we have about $1000-$1500 to play around with to either invest or pay down the mortgage, or also to improve upon our house, which is also something we are considering.