Hacker News new | past | comments | ask | show | jobs | submit login

Market returns are not guaranteed, unlike a fixed mortgage rate.



Sure, but the return on paying off a 3.5% mortgage, after interest tax deduction is maybe 2.5% which adjusted for inflation is ~0 to 0.5%.


You can. Only deduct (married) if you pay more than 10-15k of interest a year? Or am I missing something (itemized deductions is now at 20k limit or so).

Edit: and since you need to pay taxes on dividends in bank accounts, you would need something like 3.5-4% interest to match the gains from prepaying the mortgage at 2.75%?


Interest would never match it.

But ignore the interest deduction. Even if you got a 4% return and paid long term capital gains you’d be ahead.


Inflation affects both in the same way and by the same amount. Ditto taxes, mostly. It's probably best and simplest to compare nominal returns.


Assume an inflation adjusted average return of 3% on your investment and a 20% long-term capital gains you end up with 2.4% return versus 0 to 1% for prepaying a mortgage.




Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: