Q: With interest rates dropping on short term savings, I want to keep an eye on when it might pay to use those funds to pay off our mortgage.
Background: We have a mortgage at 3.25%, with $45,000 remaining at a monthly payment of $835. With the nice interest rates recently we've just been making the standard monthly payments and letting our cash earn interest above the mortgage rate. Assuming savings/TBill/MM rates continue to drop, how would I calculate when it pays to pay off the mortgage versus short term savings vehicles?
Additional details:
We take standard deduction (better than itemized for our finances), 12% Federal bracket, 5.3% state (WI). Paying off the mortgage would not create undue hardship. We also are not concerned with holding a mortgage (we won't get the warm fuzzies from being mortgage free). We may sell this house (our primary home) in the next 5 years or so. We have no other debt.
Any suggestions would be welcome![:)]( "Smile")
Background: We have a mortgage at 3.25%, with $45,000 remaining at a monthly payment of $835. With the nice interest rates recently we've just been making the standard monthly payments and letting our cash earn interest above the mortgage rate. Assuming savings/TBill/MM rates continue to drop, how would I calculate when it pays to pay off the mortgage versus short term savings vehicles?
Additional details:
We take standard deduction (better than itemized for our finances), 12% Federal bracket, 5.3% state (WI). Paying off the mortgage would not create undue hardship. We also are not concerned with holding a mortgage (we won't get the warm fuzzies from being mortgage free). We may sell this house (our primary home) in the next 5 years or so. We have no other debt.
Any suggestions would be welcome
Statistics: Posted by Badgered — Thu Sep 19, 2024 1:27 pm — Replies 4 — Views 284