Castaspey
Dryer sheet wannabe
If a title like that doesn't get a thread opened, nothing will.
My wife and I were blind pig lucky about 6 years ago when we bought our current house and got a 15 year mortgage at 2 5/8%. (Do you remember the days of 10 and 12% mortgages?) Current balance on it is about $140K. Now that we are on the verge of retirement (like this month,) DW says we should pay that mortgage off.
But in late 2018, when interests rates were the highest they had been in some time, I bought a portfolio of A3/BBB+ corporate bonds in well-established companies (Southwest Airlines, Valero, Banc One etc.) with a total value equal to about 75% of the outstanding balance on the mortgage and a weighted average interest rate of about 4.6% and the bonds all mature right about when the mortgage ends. I specifically set this up as a "mortgage offset". We pay about $3650 interest on the mortgage annually (and going down) and the bond portfolio is yielding $6450. Seems like a no brainer to me; I only wish I had bought more bonds at the time.
But she still says/feels we should pay off the mortgage. So I am not sure my thread is asking a specific question so much as illustrating the difference between the math "right answer" and the emotional "right answer."
My wife and I were blind pig lucky about 6 years ago when we bought our current house and got a 15 year mortgage at 2 5/8%. (Do you remember the days of 10 and 12% mortgages?) Current balance on it is about $140K. Now that we are on the verge of retirement (like this month,) DW says we should pay that mortgage off.
But in late 2018, when interests rates were the highest they had been in some time, I bought a portfolio of A3/BBB+ corporate bonds in well-established companies (Southwest Airlines, Valero, Banc One etc.) with a total value equal to about 75% of the outstanding balance on the mortgage and a weighted average interest rate of about 4.6% and the bonds all mature right about when the mortgage ends. I specifically set this up as a "mortgage offset". We pay about $3650 interest on the mortgage annually (and going down) and the bond portfolio is yielding $6450. Seems like a no brainer to me; I only wish I had bought more bonds at the time.
But she still says/feels we should pay off the mortgage. So I am not sure my thread is asking a specific question so much as illustrating the difference between the math "right answer" and the emotional "right answer."