The great mortgage dilemma

Medical Economics, March, 2008 by Murray, Dennis

REAL ESTATE

You've got some extra cash each month that you can't decide how to invest. Should you put it in the stock market, or use it to pay down your mortgage? The folks at Consumer Reports decided to put that question under the microscope. They found that, in most cases, investors get a bigger payoff by putting an extra $100 a month into a low-cost S&P 500 Index mutual fund than they would by adding the money to their mortgage payment. In several different scenarios in which a home was refinanced and sold after 10 years, the fund investment returned $10,058 on average, vs $4,051 for the bigger mortgage payment. For a 10-year horizon, investing turned out to be the better strategy two-thirds of the time, and the wiser choice 700 percent of the time when the hypothetical...

Read the rest of this article with a Free Trial at HighBeam Research.

Premium Content Partnership | HighBeam Research provides an in-depth online archive library of reference works.