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Originally Posted by GregWeld
A paid off house when rates are at 7 to 15% is smart.... but when they're under 4%... that would be just plain dumb.
We're at HISTORIC low mortgage rates.... and the rates of return on our investments should far out pace a FIXED mortgage. Think about this over a 10 / 15 / 30 year time frame.... surely our interest rates won't go down much from here... but they certainly could RISE from here.... So put yourself in a position to pay 4 and earn 8....
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Just to compare, in Canada you can't really write off interest on your personal home only a portion of it if you use for home office etc. It's different tax wise than the US. I'd have to check specifics but it's a less common thing up here.
Edit I just looked it up:
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Canadian federal income tax does not allow a deduction from taxable income for interest on loans secured by the taxpayer's personal residence. But homes used in businesses as a landlord who owns a rental residential property can deduct interest as any other reasonable business expense. The difference being the deduction is allowed only when the property is not used for the taxpayer's personal use but is used as in any other type of business. However, there may be additional exclusions for passive activity losses.
The home ownership rate in Canada was about the same as in the United States in 2008, but Canadians have about 70% equity in their homes on average (i.e., 30% mortgage debt), compared to only 45% average home equity in the United States.
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