We’ve had low interest rates for many years. Despite this, DEBT is still a four letter word in my world!! There’s smart debt and bad debt. If the interest on the debt is tax deductible because its financing a good investment, that’s smart debt as far as I’m concerned.

Bad debt occurs when the interest on the loan isn’t tax deductible and/or its financing a lousy investment. In recent years, even when the interest on your home mortgage hasn’t been tax deductible, the gains people have made on the increased value of their home has worked to their benefit.

At some point, the party’s going to be over, and interest rates will increase. None of us know when this will occur. While there’s virtually no risk of large interest rate increases in the near future, a rise of 1% will have a significant impact on many people.

The time to react is sooner rather than later. There’s not a one plan suits all. It will depend on the age, earning capacity, retirement plans, etc, etc, of the borrowers. Develop a plan to pay down your debt. Relieve the stress level in your lives. Having no mortgage for younger people today is almost an impossible dream. Set a realistic goal to halve the size of your mortgage by a specified date.