An interesting article by Insurance noon– a blog that tries to answer a financial choice with which those who have a mortgage are often confronted.
Safe Mortgages or Mortgage Insurance
The question is:
Having capital available, is it worthwhile to repay part of the mortgage and lower the monthly payment or is it preferable to invest the amount available in low-risk activities?
The answer is a very useful calculator and a very simple excel file to use. Just enter the duration of the loan, the amount, the amount to be repaid, the mortgage rate, the rate at which to invest your capital (risk-free rate). This last rate should be that of the government bond with the same duration as that of the loan.
The only note I can make on the calculator is to naturally simplify reality, assuming a fixed rate of the mortgage and ignoring its fiscal convenience. I refer to the IRPEF deduction of 19% of the interest expense paid about the mortgage loans stipulated for the purchase of the real estate unit to be used as the main residence.
No problem; this is compensated by a useful calculator from Mutuisupermarket, a mortgage broker and comparator, which offers a series of other free tools to support the choice of the best mortgage.
Given the current investment rates – unlike what the title of the article claims – it seems to agree on the investment with the repayment of the loan, but each situation must be evaluated separately!