When does it make sense, mathematically, to accelerate mortgage payments?

I feel like the whole "which is the most efficient way to spend my money" question is bullshite 95% of the time. How many people do you know that actually invest the money they dont spend on paying off lower interest loans in something that makes more money? I think nearly everyone just spends that money immediately or puts it in a rainy day fund where it makes almost nothing

I have my payoff sum in an account making >2x my interest rate.

What is the rule, making one extra monthly payment a year cuts 5 years off a 30 mortgage. Do that at a bare minimum.

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6.5% interest rate

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To be clear, there is no “right” answer as this is all just about opportunity cost of the marginal dollar. I am in the mathematical camp…I put no value on the “it feels so much better to own a home outright” as I’ll still be paying $3K a year in home insurance and $11K a year in property taxes (or greater into perpetuity).

With that said, 6.5% as risk free return is quite good relative to historical market returns (which is not risk adjusted). Now, 6.5% doesn’t look as good when the savings rate is 5% in money market funds but I don’t think you would regret paying down the mortgage in your situation as long as you have ample access to cash in case it is needed.

What was your point exactly? That people are bad with money? Some heavy hitting stuff there. Bad decisions are bad decisions regardless of the percentage of people you think make them.

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What was your point exactly? That people are bad with money? Some heavy hitting stuff there. Bad decisions are bad decisions regardless of the percentage of people you think make them.

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My point is that while there is a smarter way to manage your finances, we ignore a psychological aspect of it. You may even be a victim of poor money management relative to someone that is better at it.

We are not robots, by and large, and respond better to things that make us feel better (pay off loan early) than things that dont (keep the mortgage but invest the extra 5% in something that pays a little back).

Im not paying off my mortgage early and investing that money in something with a higher return. Im just saying that we shouldn't shite on people that choose something different.

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Long term mortgages have fixed payments, but the dollar value declines. In my mind the payment goes down over time since you're paying with deflated dollars.

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That's absolutely correct.

I would qualify that agreement by saying at the very start of an amortization schedule your early payments avoid a huge percentage of the interest over the duration of the loan. Which is to argue there's an argument for making a bit of extra effort at the start (first year or three) of the schedule and then just revert to paying just your regular monthly amounts.

The idea of buying only a home that you could afford to finance as a fifteen year fixed is also desirable IMO.

Great points

don't judge people man, not everyone is on the same timeline