Paying down a mortgage or investing in stocks depends heavily on individual circumstances. The key is finding a strategy that aligns with your specific financial situation, risk tolerance, and long-term goals.
Most people believe that paying off the mortgage as soon as possible is the way to go. Every dollar you pay toward your mortgage principal saves money paid on interest payments. It allows you to be mortgage-free faster, builds up your home equity, and you can eventually use the money you used to spend on interest for other things, including investment.
On the other hand, prioritizing paying off your mortgage could mean losing out on investment opportunities. The money used to pay down your mortgage could potentially be growing in investments, offering higher returns than your mortgage's interest rate. Historically, average stock market returns have been higher than mortgage rates, which means you may earn more on your investments over the long term. As well, money you invest tends to be more liquid than home equity, and some investments can offer tax advantages (i.e., RRSP, TFSA).
Of course, there is no reduction in your debt load if you opt to prioritize investment, and although historically stock markets have performed better than mortgage rates, past performance is no guarantee of future performance. Over the long term, investments can fluctuate in value, impacting your return, and there is always the risk that you can lose your money.
Experts say that if you still have a long way to go until retirement investing could offer opportunities. But, if your mortgage rate is high (higher than you would expect to earn on investments) and you are risk-averse, it makes more sense to prioritize paying off your mortgage.