I'm selling a property for $250k. I have two other properties, one with a $350K mortgage at 2.3% and the other with a $150k mortage at 6%. I don't have much cash in checking or savings accounts but do have a HELOC on the $350K mortgage property at 8.5% that I can pull from in emergencies.
What would you all recommend I do with the money? Pay off the $150k mortgage and the rest in HY savings (I have one that's 4%). Or keep the mortgage and put in an index fund in the stock market? Or a combination of index fund and HY savings? Thanks, appreciate your ideas and thoughts.
Selling property, should I use the money to pay off mortgage or put in stocks or HY savings?
byu/evertec inpersonalfinance
Posted by evertec
4 Comments
Good problem to have. The 350k mortgage. Do you live in this home? Just curious.
What I’d do is pay off the 150k house. And put any leftovers in HYSA.
I would not pay down the mortgage early.
As for whether to put it in a HYSA or some sort of investment account, that would depend on where you were at with tax advantaged retirement accounts.
Budget an extra 15-20% for surprises. Every reno has them — the question is just how big.
The decision depends on the interest rates involved. If your mortgage is at a low rate (4% or below), paying it off is a guaranteed 4% return which is less than long-term equity returns, so the math favours investing. If your mortgage rate is 6%+ or you’re approaching retirement and want to eliminate the obligation, paying it down has psychological and risk-reduction value beyond the strict return calc. HYSA is a temporary parking spot, not a destination