Invest or pay off house

Thrugelmir

steampowered said:

Mickey666 said:

But I get your point . . . anyone without a mortgage on their home should rush out asap, take out the biggest mortgage they can afford, and put it all in their pension fund. 

For people who are in the position of having inadequate retirement savings but are mortgage free, it makes complete sense to take out a mortgage to boost their pension.

This is because pensions get tax relief (20% for basic rate tax payers, 40% for higher rate tax payers) added by the government. The pension also receives investment returns (6-7% on average over the long term). 

Anyone who "loses sleep" over the fact that they have long term investments has an irrational and unhealthy fear of investing - it shows a complete lack of understanding of what investments are and how they work. 

Same discussion was made decades ago when endowment policies were all the rage and using pensions to settle interest only mortgages were in vogue. Everything in life is cyclical. Nothing is actually new.