Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open.

Should I put more money down on one property and pay it off sooner or hold on to the cash?
I'm a little confused on the use of the property today.  Is this place going to be a personal residence for you for now and become a rental later (after the mortgage is paid off)?  It does make a difference. If you can buy the house and a 100% LTV loan would cost less than 125% of comparable rent ... then buy the house, put as little of your own cash into it as possible and stretch the terms as long as possible.  Scott W is correct on a number of counts.  The "cost" of the mortgage is the after tax cost of the payments and when that money is put to work in a well-managed portfolio, it should do better over the long haul.  Don't try for big gains because doing so adds to the risk that you'll end up worse off. If you borrow money at an after-tax cost of 4% and make 6% after taxes ... you end up ahead and build wealth. A vast majority of the wealthiest people use this arbitrage to continue to build wealth.  They have plenty of money to pay off mortgages, but choose not to.  $200,000 at 2% is an extra $4000 per year.  Compounded at a 7% rate ... it adds up to $180k after 20 years ... not exactly chump change. Money in an investment account is accessible when you need it.  Money in home equity is not, has a zero rate of return (before inflation) and is not accessible except through another loan at the bank's whim.  If you lose your job and your home is close to paid off but isn't yet, you could have a serious liquidity issue. NOW ... if a 100% mortgage would cost MORE than 125% of comparable rent, then there should be no deal.  You are looking at a crappy investment.  It is cheaper and better just to rent.  I don't care if prices are going up right now.  Prices move around.  Just because Canada hasn't seen the value drops like in the US so far doesn't mean it can't happen in the future.  If comparable rents don't validate the price with a good margin for profit for an investor, then prices are frothy and cannot be trusted and you should lower your monthly costs by renting rather than buying.  That $350 per month you could save in "rent" adds up just as much as the $4000 per year in arbitrage. For rentals, you should only pull the trigger when you can do the purchase without leverage and STILL get a 10% CAP rate or higher (rate of return after taxes, insurance and other fixed costs).  That way if the rental rates drop (and again that is quite possible), you would lose some of your profit but not all of it.  If you leverage the property, there is a high probability that you could wind up losing money as rents fall and you have to cover the mortgage out of nonexistent cash flow. I know somebody is going to say, "But John, 10% CAP on rental real estate?  That's just not possible around here."  That may be the case.  It IS possible somewhere.  I have clients buying property in Arizona, New Mexico, Alberta, Michigan and even California who are finding 10% CAP rate properties.  They do exist.  They just aren't everywhere. If you want to add leverage to the rental picture to improve the return, then do so understanding the risks.  He who lives by the leverage sword, dies by the leverage sword.  Down here in the US, the real estate market is littered with corpses of people who thought they could handle that leverage sword.  It is a gory, ugly mess.