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2giornot2gi OP t1_jaabpsi wrote

Reply to comment by avalpert in Having a mortgage: pay off your house or diversify? by 2giornot2gi

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

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avalpert t1_jaagu1n wrote

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

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2giornot2gi OP t1_jaap5ai wrote

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

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avalpert t1_jab8c5k wrote

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).

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2giornot2gi OP t1_jaf4qy3 wrote

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.

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