Last month (May):
Years left: 1.833333333
P =$1,112.22, I =$102.19, Escrow =$809.48
This month (June):
Years left: 1.75
P =$1,116.62, I =$97.78, Escrow =$809.48
One month’s prepayment savings: $0
I’m now at the point in the loan where the amount of interest left to pay is almost exactly $1K. So if I paid it off today, I would save about $1K over the next 1.75 years. (If my calculations are correct, that’s an effective interest rate of less than 3%.) $1K seems like a lot of money, but it actually isn’t that great of an investment on $23.5K. Depending on the vagaries of the stock market, I could be making more like 3K on that in a retirement account or 529 plan. Of course, that isn’t a risk-free 3K. I could lose all 23.5K, though that’s pretty unlikely (losing some amount is less unlikely!).
Of course, most likely I’m not putting that money into the stock market. Most likely I’m spending it on riotous living over the course of a year long research leave. I guess that’s worth 1K to me. We’ll see!
In my situation, would you pay off the mortgage to save the 1K, invest the money to hopefully get more than 1K in earnings over that time frame, or spend that 24K on daytrips, sushi, and rent for a house someplace walkable (or possibly part of a kitchen remodel when we get back)?