Lending

By Richard Flinn

“Pay off the mortgage before you start saving.” If you look at some sources of information that offer advice on saving effectively, you may find this is their advice. However, it is not always this simple.

The key argument for this advice is based around comparing returns. Assume a mortgage rate of 9% and a current interest rate of, say, 6%. You have an economic choice as to where to place your next saved dollar. You could put it towards paying off your mortgage, or you could invest it for a return of 6%.

Asset price bubbles have been with humanity almost as long as assets – even the venerable Isaac Newton, certainly nobody’s fool, lost his shirt (and ₤20 000) in the South Sea Bubble of the early 1700s. Yet, despite their frequent recurrences, it seems people never really learn from these outbursts of economic exuberance.

By Joan Baker

Most commentators and others in the know think that residential property prices are likely to flatten off or even decline fairly soon. Even though they have been saying this for a year or more, they are probably going to be proven right some time fairly soon – everything seems to point to the market finally coming off the boil.

And the pot certainly has been bubbling away – the last few years have seen most markets greatly increase in value, making some people very wealthy indeed.

By Mary Holm, independent financial writer. Article reprinted from Holm Truths* with permission from Mary Holm.

Revolving Credit Pros

• Get credit for income & savings
• Can borrow for other things
• Flexible payments

Revolving Credit Cons

• Requires discipline
• Variable rate only
• Monthly bank fee

Traditional Pros

Paying your mortgage off early is a good thing – right? Well, that depends. It depends on you, and on what you want out of life.

Because managing your debts – and that includes big debts like your mortgage or small debts like hire purchases – is only the first part of your overall financial plan.

A financial plan doesn’t have to be complicated, but to ensure you’re making the most of your income, it’s a good idea to get advice.