I took my 15-year mortgage in 2010, $220,000, 3.875%.
Looking at an amortization schedule, I still owe $31267.36 in interest.
I got a few quotes, and if I refi for a new 10-year loan now, i could get
2.75% with 2600 - 3000 in closing costs on the remaining balance ($155,000).
And according to my calculations, the total interest on the new loan
would be in the neighborood of $22,464.52. A potential savings of $8802.84,
minus closing costs, let's say $6,000.00.
Is my thinking correct, doin a refi like this would save me $6,000.00 over the
next ten years?
Is it smart to do this, being almost six years into the 15-year loan?
Is it worth it, considering adding a year to my loan?
Thanks for any help you can provide!
Mon May 09, 2016 7:22 pm
oldguy Senior Member
Cash: $ 715.00
Joined: 21 May 2006
quote: the total interest on the new loan would be in the neighborhood of $22,464.52. A potential savings of $8802.84,
Correct - but you are calculating the wrong number - the goal is add to your net worth, not avoid paying interest.
I would (and did) get a 30 year, 4%, $155,000 loan, pat about $110,500 in interest. And apply the extra $740/m to an SP500 Index Fund, that would be about $2M in 30 yrs.
The goal is not to be debt-free, the goal is to direct your income to it's highest and best use. That way you can build significant wealth and still have plenty of spending money for your family, both are important.