Lump Sum on Mortgage Vs S&P

[jmendheim]

Good Morning, I'm hoping PFC can assist me with a big decision. We currently have 325K cash on hand are debating if we should lump some on one of our mortgages or invest it into the S & P in a non registered account.

Details

Mortgage 1: 875,000 purchase, balance 750,000. Interest rate at 6.34%. house appraised at 1.25 million
Mortgage 2: Purchase 1 million, balance 790,000, interest rate 5.9 percent. House appraised at 1.2 million.
Mortgage 3: built 2021, 1.2 million evaluation, 200k mortgage at 5.8 %. 1/3 ownership.

Both TFSA and RRSPs are maxed

Car loan: 50k purchase, 28K remaining balance, zero interest rate. Purchased before COVID.

Household salary: 400k
Mortgage 2: brings in roughly 40k yearly.

Monthly expenses, we are tight on cash flow, hence me leaning towards paying down one of the mortgages to refinance.
Partner wants to DC into S&P and let the market snowball over the years. Cash flow will increase thanks to yearly raises and bonus structure.

I personally find it difficult to swallow paying nearly 800K in interest over 25 years one either mortgage 1,2.

Thank you for the assistance.

Edit: we both have pensions as well ( DB & DC).

 

[abbycadabby20]

@jmendheim Lmao what even is this post. A humble-brag at best, but tight on cashflow with a 400k income and owning three properties?
Hire a financial advisor, not Reddit.

 

[jmendheim]

@abbycadabby20 Asking to see where capital should be allocated. If you feel insecure about the post, scroll on... Yah aren't that chill.

 

[jjp297]

@jmendheim See the thousands of same posts asked dozens of times a day: https://www.reddit.com/r/PersonalFinanceCanada/search/?q=mortgage or invest&restrict_sr=1

 

[putraandalan]

@jmendheim How are your interest rates so high? How big is your emergency fund? Does the breadwinner have life, disability, illness insurance of any sort? Are all the mortgages fixed? This would be a no brainer to me, fill emergency fund, make sure that a life event isn’t going to destroy the 40k persons life and pay down the mortgages.

 

[tedbraga]

@jmendheim Do you already have money invested in stocks/ETFs etc.? It looks like you have a very high exposure to Canadian real estate. If you have not done so already, you should diversify and then look at making lump sum payments.

Review your mortgage contract before making a lump sum to not incur prepayment penalties. Generally you would have 15-20% of the original loan balance which can be paid without any penalties.

 

[jmendheim]

@tedbraga TFSA and RRSP are invested with a financial planner. I believe they are diversified mutual funds. Have roughly 80K in Google stock as well. Maybe further diversification would benefit us. Thank you for the information.

 

[tedbraga]

@jmendheim .

You also seem to have very high-interest rates on the mortgages. You should compare the option of refinancing (with penalties) versus continuing with the current rates.