Barefoot Says: Don't Pay Off Your Mortgage?

Hi Scott,

I have just signed up for my first mortgage at the age of 56. I saved $110k over 10 years and borrowed $175k. If I pay fortnightly I can own the house outright in just under 10 years. My dilemma is that I will have $15k from the sale of some possessions and am unsure whether to do up the kitchen and bathroom or whack it straight on the mortgage. If I put it on the mortgage, I will own the house outright in 8.5 years, but will be living with an old kitchen and bathroom for that time. What do you think I should do?

Liz

Hi Liz,

At your age, I wouldn’t be making additional repayments on your mortgage. Instead, I’d be pumping your money into super (and talking to your super fund about starting a ‘transition to retirement’ pension strategy, so you pay less tax). The idea is that you can draw down on your super tax-free when you retire, and pay off the mortgage via a lump sum. I’d be inclined to keep the $15,000 in a Mojo online savings account and only spend money on renovations if chipped plaster falls on your head.

Scott