Reply to Taking out a second mortgage to buy stocks

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[quote=Anonymous][quote=Anonymous]Not sure why everyone is saying this is crazy, but at the same time, the consensus on here seems to be that paying off one's mortgage is a very dumb thing to do.

[b]Taking out a mortgage to buy stocks is exactly the same thing as not paying off a mortgage so you can free up money to invest in stocks.  [/b]Obviously, the terms of the loans differ, and that is an important distinction.  But people are still stuck on this "borrow at 3% to invest at 10%" mindset and seem to ignore the fact that stocks have never been more expensive (or *almost* never been more expensive, depending on whom you ask).

While you might get 10% in the market over the next decade, you could very realistically get 2% per year (or even -2%).  Even if you get 4%, taxes bring that down to the same 3% you get by paying off your precious mortgage.  I guess I'm an outlier, but paying off one's mortgage actually seems like a no-brainer to me right now.[/quote]

I beg to differ - one is playing with your money, the other is playing with house money[/quote]

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