Shrinking our huge mortgage for peace of mind

[RunningBum]

Perhaps the change they should make is to gain a better understanding of their complete situation, and not just fix the one stress item which may leave them exposed if they both are out of work for a longer time. Put the mortgage pay-off money in something safe which should ease their mind about the mortgage, while staying more liquid and flexible. Sure, that money will earn less than their mortgage rate, but that's a small price for insurance and piece of mind that their whole situation is safer, rather than just addressing one thing

 

[Retired Expat]

Recently my brokerage firm was offering fixed 1, 3, or 5 year loans against Portfolio values. No points, fees etc. so I used some of the cash I was sitting on from pulling about 10-15%out of the market and used this new loan option to pay off the mortgage. Which was at about 4% instead of refinancing.

Loan is at 1.5% interest only. Stashing away the difference between what I was paying in interest and principal to fund partially paying down the loan when it comes due. Can always pay off the rest at that time if needs be but the new 1.5% rate is less than any return I am getting on my bond holdings and real estate investments. The no fee or points make it a no brainer.

 

[levindb]

I would recommend you take the $700K and put it in a separate IRA account with automatic payments to your mortgage bank. If you could get a longer term mortgage at <3%, that would even be better. Do not pay any extra with the interest rates so low.
The $700K should be invested the way other funds have been according to your AA plan. It is almost like paying it off, but you still have access to the funds for emergencies. You sleep at night...you never make another payment...what could be better.

At the end of your mortgage period, you should have some extra funds to have a small party, or make charitable donations. Please don't be in a rush to get rid of a low interest loan.

 

[Retireby45ish]

Recently my brokerage firm was offering fixed 1, 3, or 5 year loans against Portfolio values. No points, fees etc. so I used some of the cash I was sitting on from pulling about 10-15%out of the market and used this new loan option to pay off the mortgage. Which was at about 4% instead of refinancing.

Loan is at 1.5% interest only. Stashing away the difference between what I was paying in interest and principal to fund partially paying down the loan when it comes due. Can always pay off the rest at that time if needs be but the new 1.5% rate is less than any return I am getting on my bond holdings and real estate investments. The no fee or points make it a no brainer.

Which brokerage was this?? 1.5% is great. And how much couldn’t borrow? Sound like a good plan (for me) since I’ve been toying with paying off my mortgage as well since I have excess cash earning between 0.5-2% in money market and bonds I was debating between that or paying off my 3.75% mortgage. At 1.5% that’s even better since it is lower rate and frees me up in case the market free falls and I can put the cash to work buying equities.

I know I am moving in 1-2 years which is why it makes sense. Otherwise I’d refinance since rates are so low.

 

[Retired Expat]

Which brokerage was this?? 1.5% is great. And how much couldn’t borrow? Sound like a good plan (for me) since I’ve been toying with paying off my mortgage as well since I have excess cash earning between 0.5-2% in money market and bonds I was debating between that or paying off my 3.75% mortgage. At 1.5% that’s even better since it is lower rate and frees me up in case the market free falls and I can put the cash to work buying equities.

I know I am moving in 1-2 years which is why it makes sense. Otherwise I’d refinance since rates are so low.

UBS. Amount you can borrow is determined by your investment account holdings

I was looking at a refi but didn’t see anything this cheap for just a few years

 

[daylatedollarshort]

If it were me, I would keep the mortgage and retire today and adjust my other spending, if needed.