Selling stocks to pay down mortgage a false economy for couple
Family Finance At their respective ages of 52 and 49, a B.C. couple we’ll call Hank and Jamie are prospering. Hank, a management consultant, brings home $7,084 a month. Jamie, a parttime translator, brings home $1,700 a month after tax. They have two children ages 17 and 20, each in university. They would like to retire in eight years.
The $314,000 mortgage on their $1.2 million house costs $2,500 a month at 2.1 per cent. It has a dozen years to run. If rates rise to 6 per cent, the monthly payment would go up to as much as $3,000.
Hank and Jamie would like to retire with a combined, pre-tax income of $95,000 a year. That would be about 60 per cent of their present gross income. Their $314,000 outstanding mortgage will not be paid until Hank’s age 64 if the present schedule is maintained.