extra 3,000$ to pay off the variable rate mortgage or to get rrsps?

Q: Feb 2011:  can you do a piece on whether to spend my extra 3,000$ to pay off the variable rate mortgage or to get rrsps?

A: Thanks for the suggestion , It’s in our option to maximize your RRSP’s

since the stock prices are on the lower end and to use the $3,000 to maximize paying less income taxes and debts would be ideal.

This is the best way to look at using a much lower interest rate mortgage to do the following :

1)     paying off your highest interest debts first.

2)     If you have no debts , than try to maximize your RRSP’s to lower your income tax brackets, if you need a good financial advisor , we have one in house

3)     On a typical Variable rate of say 2.25% we would like to see you get a conservative return of say 5%-7% on your investments and pay less in taxes.

Good luck and if you need to look at refinancing to pay down debts and say catch up on some RRSP’s let me know.

But thank for the great question J

Peter Majthenyi & Andre Semeniuk.

Mortgage Planners, B.Econ AMP.

Mortgage Architects - Mortgage Planner

Agent # M08003768 

1026 The Queensway at Islington

Toronto, ON.  M8Z 1P7