I KNOW $50 a month doesn’t sound like much, especially if you have a huge home loan.

But if you let your mortgage eat the rate cut, instead of putting it back in your pocket, that $50 will wipe as much as $41,000 off the average mortgage.

(That’s also why it’s important to tart yourself around to the banks every few years).

Given the global economy is as patchy as Shane Warne’s spray-tan, your mortgage is the smartest place to park your dough.

Research by ANZ found the best investment over the past 24 years was owning a home (12 per cent), beating investment properties (9.6 per cent and shares (8.9 per cent).

Right now I’m keeping my mortgage variable, even though the banks are offering cheaper fixed rates. Why? Because if I fix and rates drop I’ll be slugged with a break fee.

Depending on what happens in Europe, we could see more rate cuts and that’s when I’ll be looking to lock in – but in the meantime I’m aggressively paying off my loan (even more than $50 a month).

Source:  Scott Pape, The Barefoot Investor.

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