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Pay off the mortgage vs invest?

For many of us, buying a home will be the largest financial commitment and the most sizable investment we will ever make.

According to the Australian Bureau of Statistics, the average mortgage size across the country is just under $550,000 and the average variable interest rate for home loans is sitting at 3.93%.

Property values are continuing to increase and competition across the real estate market is high.

Looking at these statistics you can see why paying your mortgage off as quickly as possible, and owning such an asset, is a tempting prospect.

And there are several positives.

Reducing the amount of interest you are paying on a loan can generate substantial savings across its duration. And by focusing on paying down your mortgage you will also build equity against the property which could be reinvested in renovations – to live more comfortably but to also increase its overall value.

But what about investments outside of your home?

Investing in superannuation and planning for your retirement is certainly something to be considered by homeowners. Unlike mortgage repayments there can also be salary sacrifice and taxation considerations / incentives associated with super contributions.

And then there are shares and a more diversified investment portfolio which could benefit your broader personal wealth management strategy. Should the real estate market begin to contract, or property values decrease, this diversification will provide additional security.

For others, the freedom – and satisfaction! – associated with paying off your mortgage ahead of time will open up investment opportunities at a later date.

Of course, there is no one answer to the ‘pay off the mortgage vs invest?’ question - considerations must be made in relation to your age, the size of your mortgage, your future plans and spending habits.

Whatever your financial focus, here at Hub we recommend seeking professional advice which is tailored specifically to your personal situation and your goals. Send an email to if you’d like to make an appointment and discuss your options further.

Source: Australian Bureau of Statistics;

This information has been provided as general advice. We have not considered your financial circumstances, needs or objectives. You should consider the appropriateness of the advice. You should obtain and consider the relevant Product Disclosure Statement (PDS) and seek the assistance of an authorised financial adviser before making any decision regarding any products or strategies mentioned in this communication.

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