Stewart & Kett in the Media

Our staff are regularly interviewed in the media discussing financial topics of interest to our clients



Pay down the mortgage? Or build up your RRSP?

Jan 16, 2015 Media Morningstar

Morningstar, Vikram Barhat

How to decide? Cynthia Kett, a principal with the advice-only firm Stewart & Kett Financial Advisors Inc. in Toronto, suggests considering your mortgage rate on a pre-tax basis.

“If you’re in a 50% marginal tax bracket, your pre-tax mortgage rate would be double your stated rate,” she says. “A 2.5% mortgage rate would be equivalent to 5% on a pre-tax basis. By paying down your mortgage, you’re earning a guaranteed rate of return equal to the pre-tax mortgage rate. Where else could you get the same risk-free rate of return?”

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