Prepared to pay interest

System

Adindas-

.Unless you bought your house when they were high in price (e.g you will have negative equity), it is highly likely the value of your house are higher then when you first bought. The people who were in negative equity a few years ago might now see that they have gained from the value of their properties.

The same with equities if you treated them the same way as housing - ie didn't sell in a crash. There is always a recovery, it just may take a few years

Renting is borrowing... A whole property instead of simply part of its value

And most people would be waiting forever if they paid off their mortgage first and would have less time to make a success of investing

adindas

MatthewAinsworth wrote: »

Adindas-

The same with equities if you treated them the same way as housing - ie didn't sell in a crash. There is always a recovery, it just may take a few years

MatthewAinsworth wrote: »

Renting is borrowing... A whole property instead of simply part of its value

Renting is borrowing ???:mad:
If you are living in London pay rent say £1500 a month for a flat. And now you bought a House and you pay mortgage of £1500 or even lower and by t he end of the mortgage period you already earn the house. Is it not clear ??

Keep in mind the cost of borrowing with mortgage is low due to secure loan nature.

MatthewAinsworth wrote: »

And most people would be waiting forever if they paid off their mortgage first and would have less time to make a success of investing

And what prevent people to do both ?? Many people have mortgage and doing investing as well

adindas

MatthewAinsworth wrote: »

Renting is borrowing... A whole property instead of simply part of its value

Renting is borrowing ???:mad:
If you are living in London pay rent say £1500 a month for a flat. And now you bought a flat and you pay mortgage of £1500 or even lower and by the end of the mortgage period you already own the house.

You put your house deposit into investment and say you make £1500 a month which is already very hard to get all of this money will go to your rent. BU the end of investment period your investment gain is already eaten by your rent.

Is it not clear which one is the clear winner ??

Keep in mind the cost of borrowing with mortgage is low due to secure loan nature.

MatthewAinsworth wrote: »

And most people would be waiting forever if they paid off their mortgage first and would have less time to make a success of investing

And what prevent people to do both ?? Many people have mortgage and doing investing as well

System

Adindas- of course mortgage the winner, i mean with renting you're borrowing the property itself and rent is the interest, it is a more expensive form of credit than a mortgage, and a different type since you don't get capital gains

An interesting compromise is leasehold- still borrowing the property, but long enough to have capital gains

Nothing stops someone having a mortgage and investing, i do, I'm saying if they overpayed the mortgage they forgo investment opportunity

Smiley_Dan

It's a false dichotomy to compare the debt from a mortgage, which is low cost with a longer term, to the debt from a CC.

Obviously both matter, but in terms of security and risk it's probably the term that's important. I remember during the early 2000s it took several years for the markets to turn again and a good six or seven years before they recovered their losses (and that's ignoring the cost of any debt taken out in the meantime!).

This is a bad idea.

alexanderalexander

MatthewAinsworth wrote: »

And most people would be waiting forever if they paid off their mortgage first and would have less time to make a success of investing

This is what I always think when I see people getting so horrified at the thought of borrowing to invest in the stock market. If you put any money at all into stock markets before you've paid off your mortgage, then you are indirectly borrowing to invest already. Almost everyone I know who invests in the stock market has a mortgage, so it clearly isn't all that odd a thing to do.

The only big obvious difference here is that an interest-free credit card will jump to a horrendous interest rate (15%+) as soon as the promo period is over, whereas even the worst mortgage lenders' SVRs are only around 5% or so at the moment -- so you have to be pretty confident that you can re-finance to another 0% card or have some other back-up strategy for paying down your credit card debt.

System

I'm tossing up the idea of a regular saver ready to pay it off with 100% certainty, or paying down the card directly for better credit rating from the next card, erring on the credit rating side.

I would not balance transfer, as there's risk of rejection

Chrysalis

My advise is simple, if you can afford to clear the debt should your gamble not pay off, then go for it, if not then dont.

I was thinking 6 months back to whack a few grand on chelsea winning the EPL using a credit card which I put at almost a certainty given historical data on EPL leaders with similar leads at that point of the season, they did actually win and I would have won a four figure sum, however since I wasnt prepared to clear the debt immediately should I lose I didnt go ahead with it. I also dont want to become a gambling addict and for that reason I am glad I didnt do it even tho they won.