avalpert t1_jaa96z4 wrote on February 27, 2023 at 11:53 PM

What's the interest rate on the mortgage - that is the single most relevant piece of information to making a financial decision about whether to pay towards it or not and you didn't even mention it.

2giornot2gi OP t1_jaabpsi wrote on February 28, 2023 at 12:10 AM

Right now it's very low, but will go up incrementally over the next five years until it hits market value.

avalpert t1_jaagu1n wrote on February 28, 2023 at 12:47 AM

So it is a variable rate? What is it now and what are the adjustment steps?

2giornot2gi OP t1_jaap5ai wrote on February 28, 2023 at 1:49 AM

2.64% rising .25% every year until it hits market.

avalpert t1_jab8c5k wrote on February 28, 2023 at 4:19 AM

That's pretty low and not rising all that quick. I wouldn't even consider paying more towards it for the next few years. Absolutely not when even savings account rates are higher - me personally, I wouldn't rush it so long as the rate is less than 300 basis points over the 10-year treasury (about half of the historical equity risk premium).

2giornot2gi OP t1_jaf4qy3 wrote on February 28, 2023 at 11:57 PM

Okay, now explain it like I'm five...

You're saying it isn't worth investing more into the house while the rates are low because the extra room in my budget is simply better utilized elsewhere? And I should only be trying to pay more of my mortgage when higher rates force me to?

Thanks for your insight. Sorry for my ignorance, I'm very new to this.