Last month (May):
Years left: 0.833333333
P =$1,166.21, I =$48.19, Escrow =$812.79
This month (June):
Years left: 0.75
P =$1,170.83, I =$43.57, Escrow =$812.79
Amount saved from prepayment: $0
Three quarters of a year left on the mortgage. That’s 9 months. There’s less than 10K remaining.
We could pay it off pretty easily at this point even as we enter the unpaid summer and the end of our expensive year in paradise. (Watch the savings account drain with living and moving expenses!)
But if we paid if off, do you know how much we would save in interest? $180.20. One hundred eighty dollars and twenty cents.
That’s not much.
Paying down 10K at the beginning of a mortgage can save huge amounts in interest, even with inflation taken into account. But near the end, it’s the price of a pair of European shoes. Or the reward you might get for opening a new bank account. Or a fancy dinner out.
So even though it would be easy to pay off the mortgage right now, there’s really no point other than saving the hassle of writing checks, which isn’t a hassle that particularly bothers me. But putting lump sums towards the newly refinanced mortgage 5 years ago made a lot more sense in terms of interest savings.
Would you pay off a 10k debt in a lump instead of over 9mo in order to save $200?