Who Picked Up a New Mortgage While They Were On Sale?

[fnord123]

Good point TBV.

For my mortgage (fixed 30 4.5% not factoring in tax deduction), I do not prepay, even though all the guaranteed return investments I can find yield less than 4.5%.  My reasoning is that the PP will likely yield more than 4.5%, so I just put the money in there instead.

I'd be curious about others take on whether to put spare cash towards mortgage prepayment (or any loan that yields something south of the PP) or put their money towards their PP.

[TBV]

I'm mulling over the same issue, myself.  Have read over at John Hussman's site that S&P 500 market returns for the coming decade are expected to be somewhere around 3.25% before inflation.  That makes paying off your 4.5% mortgage seem like a good idea.  Now, of course, the PP has averaged closer to 9% over time, so putting your money there might be the best play of all.  Then again, who really knows how all this will turn out?

[brajalle]

It seems like we're all having the same issue - I felt I solved mine on the refinance and when comparing returns.  I save in Roth vehicles, so contributing to the PP in them (in this case, I ended up maxing my 457 and IRA) was something I considered a better investment in the end. 

[hrux]

We got a 5/1 ARM amortized over 30 years at 2.875%.