Mortgage vs. Investment Decision Quiz

What is the primary factor to consider when deciding between paying off a mortgage early or investing?

• The length of the mortgage term

• The current stock market performance

• The mortgage interest rate

• The amount of extra money available

In the early years of a mortgage, what is the majority of the monthly payment applied to?

• Interest

• Principal

• Taxes

• Insurance

What is the average annualized return of the S&P 500 since 1957?

• 7.26%

• 12.26%

• 5.26%

• 10.26%

If your mortgage interest rate is 3%, what is the financial benefit of making extra payments towards the mortgage?

• Earning 10% on your money

• Earning 3% on your money

• Earning 5% on your money

• Earning 7% on your money

Which strategy involves making 26 bi-weekly payments instead of 12 monthly payments?

• Bi-weekly payments

• Paying extra monthly

• Refinancing the mortgage

• Applying windfalls

How much interest can be saved by paying an extra $200 per month on a 7% interest mortgage?

• $50,000

• $78,900

• $126,000

• $134,000

What should you do with a windfall of cash to pay off your mortgage faster?

• Use it for home improvements

• Save it in a bank account

• Apply it to the principal balance

• Invest it in stocks

What is one intangible benefit of paying off a mortgage early?

• Higher monthly payments

• Increased peace of mind

• Lower credit score

• Higher interest rates

What financial freedom does paying off a mortgage provide?

• Higher interest rates

• Ability to take on more debt

• No monthly mortgage payment

• No need to invest

What is a potential benefit of lowering your debt-to-income ratio?

• Higher mortgage payments

• Lower investment returns

• Increased credit score

• Decreased credit score