Mortgage Paydown or RRSP?

One of the most common financial planning questions is, "Do I allocate any extra disposable income against my mortgage or invest for tomorrow?"

The simple answer was, if the interest rate on the mortgage was greater than the expected rate of return on the investment, then it would make sense to pay off the mortgage debt first. Or vice versa, if the rate of return was greater than the mortgage interest rate, then invest the extra. The ultimate goal was to increase your net worth as efficiently as possible.

As each situation is unique, it is critical to run the numbers or calculations to see what makes the most sense (please review the attached sample).

RRSP or Mortgage Paydown

There is actually a better strategy which can combine both ideas together. First, take at look at the Smart Equity™ debt management tool. This is a very powerful program that can save tens of thousands to hundreds of thousands in interest, WITHOUT increasing your monthly mortgage payments.

This now frees up any extra disposable income for any and all types of investments, to further enhance your net worth and possible retirement savings. Now you don't have to choose, you can always allocate extra funds to any and all investments of your choice.


BTN Financial Services Inc.

205 - 45923 Airport Road

Chilliwack, BC V2P 1A3


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