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Forum
-> Household Management
-> Finances
If you have a mortgage, do you pay extra principal monthly?
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| Yes |
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15% |
[ 11 ] |
| Depends on the month and what other expenses come up |
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6% |
[ 5 ] |
| No |
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69% |
[ 51 ] |
| I don’t have a mortgage and just like participating in polls |
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8% |
[ 6 ] |
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| Total Votes : 73 |
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amother
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 Sat, May 18 2024, 10:37 pm
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Curious what others do. I try to pay an extra $100 because I really want to own the house free and clear sooner.
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amother
Clear
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Sat, May 18 2024, 10:40 pm
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Not monthly, but I started paying one or two additional monthly mortgages per year
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amother
Lavender
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Sat, May 18 2024, 11:05 pm
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I don't have a mortgage, but I have a financed vehicle. Even though we have a very low rate (under 1%) I do try to pay at least an extra few dollars a month.
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amother
Gold
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Sat, May 18 2024, 11:09 pm
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We pay as much as we can; sometimes up to 5k. Lately we are tight so don’t pay anything and it makes me sad because it really saves a lot of money and years off our mortgage.
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amother
Stone
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Sat, May 18 2024, 11:15 pm
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I once read somewhere that paying half your mortgage payment every two weeks instead of in full every month, will shorten your 30 year mortgage by 5 years. (You end up making extra payments because a month has more than 4 weeks). If you can swing that financially, it's definitely worthwhile
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5
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Genius
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Sat, May 18 2024, 11:38 pm
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It’s sometimes worth taking the capital and investing it where it has potential to earn more than what you’re saving off your mortgage. Just putting it out there.
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10
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teachkids
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Sun, May 19 2024, 12:26 am
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When we took the mortgage my husband thought we were going to. But we're just sinking more and more in debt and the mortgage is the best rate of all our loans
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amother
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Sun, May 19 2024, 2:20 am
If you locked in a 2.75% rate as many did it would be very foolish to pay down the mortgage principal. Put it in a 5% CD or buy and hold the S&P for an average long term return of over 8%. Why give free money to the bank?
Remember, you will never own your house free and clear. Taxes and insurance go up every year. You will be paying 2-3k a month or more in property taxes 15 years from now even if you own the house free and clear.
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amother
Seashell
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Sun, May 19 2024, 3:48 am
| amother Cherry wrote: | If you locked in a 2.75% rate as many did it would be very foolish to pay down the mortgage principal. Put it in a 5% CD or buy and hold the S&P for an average long term return of over 8%. Why give free money to the bank?
Remember, you will never own your house free and clear. Taxes and insurance go up every year. You will be paying 2-3k a month or more in property taxes 15 years from now even if you own the house free and clear. |
First of all, you can't make a blanket statement about how much people will be paying in taxes per month. 3k is double what I currently pay for my mortgage, insurance and property tax combined, so it doesn't really sound realistic to say that I'll be paying that much for property tax and insurance alone in 15 years if my mortgage were paid off.
Also, many cities have tax credits for people over 65 so they don't have to pay propety taxes anymore.
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amother
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Sun, May 19 2024, 4:52 am
| amother Seashell wrote: | First of all, you can't make a blanket statement about how much people will be paying in taxes per month. 3k is double what I currently pay for my mortgage, insurance and property tax combined, so it doesn't really sound realistic to say that I'll be paying that much for property tax and insurance alone in 15 years if my mortgage were paid off.
Also, many cities have tax credits for people over 65 so they don't have to pay propety taxes anymore. |
In Lakewood, 5 Towns Passaic, Monsey etc. Taxes on the sverage house are well over 10k and will easily double in the next 15 to 20 years. Some places freeze tax rates at 65. Very few to none stop charging property tax.
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amother
Springgreen
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Sun, May 19 2024, 5:14 am
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If you make one extra payment a year on your loan towards principal it takes off years from your mortgage. I try to do that.
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amother
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Sun, May 19 2024, 5:36 am
| amother Springgreen wrote: | | If you make one extra payment a year on your loan towards principal it takes off years from your mortgage. I try to do that. |
If you have a 3% 30 year mortgage and take that same one extra payment and invest it at 8% average return instead of paying of your principal, instead of shaving 5 years off of your mortgage so you are mortgage free in 25 years, you will have 4 to 5 TIMES that amount in your investment account!
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amother
Denim
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Sun, May 19 2024, 5:39 am
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No, have a low interest rate. Its more worthwhile to invest the extra money instead of paying down the mortgage
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amother
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Sun, May 19 2024, 5:51 am
| amother Cherry wrote: | | If you have a 3% 30 year mortgage and take that same one extra payment and invest it at 8% average return instead of paying of your principal, instead of shaving 5 years off of your mortgage so you are mortgage free in 25 years, you will have 4 to 5 TIMES that amount in your investment account! |
Where and how do you invest to get an 8% rate??
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amother
Cognac
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Sun, May 19 2024, 5:55 am
I did it sometimes as I have the kind of mortgage that I could just pay whatever I wanted above the minimum.
For several years I am theoretically able to pay off the mortgage completely but I haven't and I pay the minimum amount.
The interest is tax deductible and it is lower than the returns on my investment so there is no point in paying it off.
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amother
Glitter
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Sun, May 19 2024, 6:05 am
| amother OP wrote: | | Where and how do you invest to get an 8% rate?? |
Mutual funds. The stock market has that average rate of return.
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amother
Ballota
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Sun, May 19 2024, 6:37 am
We do.
We live in Canada and our mortgage rate changes with the market every five years
We bought during COVID with the low interest rates and are worried about carrying our mortgage with super high interest rates. We're basically guaranteed over the life of the loan to pay much higher rates than we do now.
We're adding when we can so that if the payments become to much we should hopefully be able to rextend the length of the mortgage to what it originally was and not lose the house.
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amother
White
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Sun, May 19 2024, 6:40 am
| amother Cherry wrote: | | In Lakewood, 5 Towns Passaic, Monsey etc. Taxes on the sverage house are well over 10k and will easily double in the next 15 to 20 years. Some places freeze tax rates at 65. Very few to none stop charging property tax. |
In the past 10 years my taxes in one of those cities has gone up less than 15%. Yes people should assume some sort of inflation, and it’s good to remember that taxes and insurance will never be paid off but we don’t have to give doom and gloom predictions that aren’t based on any real information.
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nicole81
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Sun, May 19 2024, 7:50 am
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I have credit cards with a much higher interest rate and I have investments that make more as well. So depending on the month and what's on my cards, I pay extra on the cards or put extra into my investments. Never into my mortgage which has the lowest rate of all.
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