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Here is my situation - I'll have my current home paid off in the next couple of years. I own a rental property with a mortgage that will be paid off in the next 10 years. No credit card or other debt to speak of. I have a DB pension plan, and my wife has a DC plan. 15 years from retirement. Small amount in RRSP's with lots of room to contribute. We have recently starting looking at bigger homes in nicer neighborhoods. We can easily afford such a home but it would mean carrying a mortgage for another 15 years or so rather than being mortgage free. Should we or shouldn't we?
 

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My wife and I are in a similar situation. We want pay off our current mortgage in early 2012... the thought of being mortgage free before we hit 40has strong appeal. But we also desire to move up from our condo living to a nice end unit townhouse or a small bungalow...

So strong is our desire to never have a mortgage again that we are likely to pony up the cash to move into a bigger place. Probably means we will have to come up with 100k or so... with our mortgage gone we can probably save this amount in 2 years.

I can't explain properly the intense disdain we feel about paying a mortgage.

Then there is my crazy plan to retire at 45... which would be much more likely to work if we just stayed in our paid off condo with its small property taxes and reasonable strata fees... our housing costs would only be about $200 per month... the more I think about it we should just stay put. :D
 

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No! You're only 15 years from retirement and your most financially beneficial years are now. If you will be retiring young, how old will you live? If you live to be 90 and you retire at 55 that is 35 years of reduced income. Even though you have pension plans, what will you and her be doing all day after you retire? If you want to cruise the world this will take money. Better enjoy living in a paid home and set that "extra" monthly money aside in your RRSP or whatever. Buying another house now is the worst thing you can do.

Just because you CAN do something, doesn't mean that you should.

Pardon my harshness. I mean well, despite my tone.
 

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I think everyone has their own situation and priorities...

If you want to live the rest of your days in a bigger house, and you can "easily" afford it, then why not

A DB, DC and some RRSP is a pretty solid foundation.

Depends what you want... money to travel the world, a fortune to leave for the kids?
 

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Some very good points here... we are in a similiar situation but a bit different - we will end up moving within the next few years so we will have to buy a new house anyway.... at which time I hope to get a big bigger house with a larger yard, which will put us back into having a mortgage. I'm dreading having to "throw away" money paying interest on a mortgage but love the idea of a bigger house.

When I check out amortization schedules I cringe at the hundreds of dollars each month thrown away... wasted.... on paying a mortgage. I hate even thinking about it! :(
 

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How old are you? "15 years from retirement" - does that mean you are 50?

I think your question is one that only you can answer. If you want a bigger house and it fits your lifestyle/financial goals then go for it. If you just want a bigger house "because you can" - then you might want to think about it for a while.

I'm hoping to be mortgage-free in a couple of years and I can assure you that I won't be borrowing to buy a bigger house or to finish the basement (which I'd love to do).
 

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I think the decision hinges on what you are planning to do upon retirement. If you remain in the bigger house, then you are lving beyond your means by taking on a mortgage.

OTOH if you plan to downsize when your retire, then the forced savings and higher leverage might create another buffer to retire on.
 

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I would only move to a better/bigger house if I could pay it cash, without a mortgage. A mortgage is a plague that only young people, without savings, should undertake.
 

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Discussion Starter #12
Thanks for the replies. I think I knew the answer before I asked the question - I also share a disdain for mortgages and I'm really looking forward to a mortgage free lifestyle. Maybe I should just stop browsing the MLS!
 
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