Repay your mortgage

We are nearly at the end of the first recession year we've had in Britain since the early 1990's.

According to the Guardian, householders have reacted to the downturn by repaying mortgage debt - by £7bn in each of the first and second quarters, and £4.9 billion in the third quarter.

Which brings me to a post I wrote about repaying mortgage debt back in early 2007 when it looked like the good times would roll on forever. Many people in the comments of that post pooh-poohed my advice and said that instead you should put money in the stock market because "studies show it's the best investment"! Well that might have been true in the 20th century, but it's not true of the 21st century. The stock market has been flat over the last decade. The only people sitting pretty right now are those who took my advice to overpay their mortgages, as they now have little debt and can cope better with downturns.

Looking forward to 2010, it's not clear what the economic outlook will be. It looks like tax rises and govt cuts are coming, and these always slow down economies even more. So prepare by repaying as much debt as you can.