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Mortgage as Efficient Investment Strategy

Factors Mortgages

Some homebuyers think that mortgage is the only way to ownership. However, according to a recent survey conducted by Investors Group, mortgages are now used as an efficient investment strategy, especially for those wealthy Canadians. The group found that sixty-seven percent of Canadians that are of high net-worth and with investable assets worth 500,000 dollars or more, who have a mortgage has the ability to pay off their property or home in full if they choose to do so. Many wealthy Canadians are now paying on their properties as an essential investment strategy.

 

The survey also revealed that forty-two percent of Canadians have made investments in rental properties and more than one-quarter of those high net-worth Canadians with mortgages don’t have any plans to eliminate their mortgage before their retire.

 

Before, it is vital for an individual to eliminate his/her debts. This is especially essential during those times where interest rates were high. For many people in the past, having debts prevents them from investing in more important matters for their future, such as education, retirement and others. However, the case is much different today.

 

Nowadays, people may want to retain current investments instead of triggering capital gains taxes. This only means that paying down mortgages on a regular basis is not really the best strategy. Mortgage debt actually brings tax-efficient functions. These include making essential investment in assets that can produce great amount of income such as real estate and such asset can yield cash returns.

 

Mortgages are actually offering access to those lower-cost funds, as compared to lending facilities. This is because they are viewed by many lenders as being entirely secured. Mortgages are also viewed to have equity portion in case that the value changes in the future. This is just a manifestation of the great importance of mortgage for people in this economic situation.

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