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Message
re: Another question regarding paying down your mortgage...
Posted on 10/7/12 at 9:35 am to BestBanker
Posted on 10/7/12 at 9:35 am to BestBanker
quote:If you don't spend the extra $1,000 today it gets hit at 5% for the next 30 years. So yes, that is a 5% gain in your favor.
What is missing here is the fact that you do not earn 5% on your money when you pay off a 5% mortgage note.
quote:There is no question that in all likelihood you can invest $1000 today and over 30 years it will earn more than your mortgage rate. That is, he could earn 10% in the stock market on that $1,000 instead of 5% paid on the mortgage. No one is debating that.
Now run your calculation taking your extra payment at the time period you will make said payment at some earnings rate,
But his premise is, he wants the peace of mind of not having a house payment, not - he wants to know what path to take to have the biggest pile of money in 30 years.
1
Posted on 10/7/12 at 11:41 am to Lou
quote:
But his premise is, he wants the peace of mind of not having a house payment
That was not the premise, it was just something he mentioned, while asking about the actual numbers behind it.
We get it, you like Dave Ramsey. Can we stop the flaming now?
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