old mortgage:
247k 6% 5y
monthly payment: $1580
at the end of 2nd year: $237838 principle,
at the end of 5th year if I don't cancel, $221896 principle
new mortgage: 23 years instead of 25 years @ 5.1%, with 8500 cash back to pay the 8000 penalty. 500 cash goes to my pocket, good.
beginning principle: $237838 (from above at the end of 2nd year).
monthly payment $1458
over pay $122/month so the monthly payment = 1580, the same as above
3 years later
principle: $215350
so what I get:
$500 cash now at the cancelation.
$221896 - $215350 = $6546 saving in principle 3 years later.
(and the payment of each month is the same, and I didn't pay any cash from my pocket. everything else is that same, just saved priciple.)
what I lost :
If I cancel the 3 year new mortgage, I need to pay back the 8500 cash back + the penalty.
so I can NOT afford to cancel the new one.
Use flexibility to change to money.
247k 6% 5y
monthly payment: $1580
at the end of 2nd year: $237838 principle,
at the end of 5th year if I don't cancel, $221896 principle
new mortgage: 23 years instead of 25 years @ 5.1%, with 8500 cash back to pay the 8000 penalty. 500 cash goes to my pocket, good.
beginning principle: $237838 (from above at the end of 2nd year).
monthly payment $1458
over pay $122/month so the monthly payment = 1580, the same as above
3 years later
principle: $215350
so what I get:
$500 cash now at the cancelation.
$221896 - $215350 = $6546 saving in principle 3 years later.
(and the payment of each month is the same, and I didn't pay any cash from my pocket. everything else is that same, just saved priciple.)
what I lost :
If I cancel the 3 year new mortgage, I need to pay back the 8500 cash back + the penalty.
so I can NOT afford to cancel the new one.
Use flexibility to change to money.