Last month (December):
Years left: 9.666666667
P = $765.99, I =$448.41, Escrow = 726.93
This month (January):
Years left: 9.583333333
P = $771.23, I =$443.17, Escrow = 726.93
One months savings from this month’s prepayment: ~$2.22. They haven’t figured out that our escrow should be smaller yet. We looked at the papers again and it says we need at least 1200 something in there and we only have 700 or so because they just paid escrow. So one of these months…
We will occasionally get notices from our Big Bank (not our credit union) that fees will be going up for checking and/or savings accounts. Currently we have no fees.
Each time this happens, we check around and we find that we’re still exempt from fees because we have our mortgage with the Big Bank.
What about when we no longer have a mortgage… will we then pay fees? Or maybe we’ll have to do one of those sleight of hand things with direct deposit or something that’s a PITA, especially when the keep changing what you need to do to not pay those fees.
Makes one think that maybe keeping the mortgage is worth it.
Except… the monthly cost of the mortgage is currently $443.17 in interest. If we stopped doing pre-payments, our last full payment would be $7.11 in interest (followed by a $2.43 interest cost on a partial payment). The monthly cost of having to pay for the accounts would be more like $5. That seems like a silly reason to keep the mortgage.
Of course, in reality, we’d just close up the Big Bank account rather than pay $5/month on it or deal with constantly changing hassle. We still have our free credit union account, after all. It’s obviously not worth $5/month to keep bank account… so it shouldn’t be worth what we’re paying in mortgage interest either.
Bottom line: free checking is not a good reason to keep a mortgage! But it’s a nice benefit given you’ve got a mortgage.