I recently read a fantastic article by Rob Carrick (a Personal Finance columnist from the Globe and Mail) that I encourage you to read called “Once again: Pay down your debts before rates rise.” The gist of the article is that rates are currently at historic lows, but the Bank of Canada is seriously indicating that these low rates will start to disappear now that economic conditions seem to be improving. We’ve been hearing this for a couple of years, but Rob gives us “10 reasons not to tune out this time around.” Without giving away the whole article (because, seriously, go read it), here are his 10 points:
- Rates will eventually rise – it’s inevitable
- Borrowing means you can’t afford the stuff you’re buying (houses excepted, of course)
- Cutting debt gives you a buzz (try it – like I mentioned last week, use your tax refund as a mortgage pre-payment, and you’ll understand what he means)
- Less stress
- Your next mortgage renewal could be scary (especially if you’ve gotten a mortgage in the past year in the 3%-4% range)
- Your kids need help affording university
- You get more control over when you retire
- You won’t retire with debt (a financially secure retirement starts with zero debt)
- You’re covered for emergencies
- There’s no down side (long term, you’re never going to regret paying off your debts)
Of course, all this starts with good financial advice. If you want some mortgage-related financial advice, talk to your favorite mortgage broker – we love helping folks get their finances in order (I know some great financial advisors, too, if you want to go that route)!
