dm
Full time employment: Posting here.
I too have been pondering about paying off my mortgage. I have a 15yr, 5% mortgage. I am in the second year.
My mortgage is $120,000 and my principle and interest payment is $950. I will pay around 50,000 in interest over the term of the loan.
I guess I'm looking at it in more in terms of cash flow. If I could get 5% on my 120,000 invested it would still only get me $6000 . I would still have to come up with the additional $5400. I would also have to pay taxes on the 6000. Now I realize my principle would be reduced but Im also paying the bank the $5400.
If I don't have to come up with the $5400 interest payment to the bank, it is continuing to earn money for me. Thus offsetting somewhat if interest rates rise in the future. Now this value would change each year of coarse and Im not going to calculate it for each year, but you get the idea. Also the money that doesn't go to the payment will also be componding each year.
Im sure Im missing something but it just seems easier to payoff the bank and not worry about comming up with the $950 a month payment for the next 13yrs.
My mortgage is $120,000 and my principle and interest payment is $950. I will pay around 50,000 in interest over the term of the loan.
I guess I'm looking at it in more in terms of cash flow. If I could get 5% on my 120,000 invested it would still only get me $6000 . I would still have to come up with the additional $5400. I would also have to pay taxes on the 6000. Now I realize my principle would be reduced but Im also paying the bank the $5400.
If I don't have to come up with the $5400 interest payment to the bank, it is continuing to earn money for me. Thus offsetting somewhat if interest rates rise in the future. Now this value would change each year of coarse and Im not going to calculate it for each year, but you get the idea. Also the money that doesn't go to the payment will also be componding each year.
Im sure Im missing something but it just seems easier to payoff the bank and not worry about comming up with the $950 a month payment for the next 13yrs.