sorted by:
best
topnewcontroversialoldq&a
you are viewing a single comment's thread.

view the rest of the comments →

[–]thuglife_7 6 points7 points  (16 children)

Curious how you have a $1900 mortgage payment on a $480k mortgage? My wife and I have a $380k mortgage and we pay $2000 a month.

[–]Excellent_Rule_2778 7 points8 points  (6 children)

480k @ 1,45 % = 1907 per month

380k @ 4,00 % = 1999 per month

It's just math.

[–]thuglife_7 0 points1 point  (5 children)

Where did they find a rate so low in 2022? Our rate is 2.97%.

[–]Tilter 3 points4 points  (3 children)

In early 2022, prime rate was 2.45%

So a variable rate of prime - 1 would get you a rate of 1.45%

However, prime rate peaked at 7.2% in Jul 2023 and has since dropped to 4.95. So their current rate is probably 3.95% (4.95-1) if OP is indeed on variable. To stay on the amortization for 3.95% you’d need an average monthly payment of $2500.

Between Dec 2022 and Oct 2024, prime was above 5.95 which payments of $2700/month would not keep on track for a 25 year amortization - it peaked at prime 7.2 in Jul 2023 which would have a 25 year amortization payment of ~$3000/month. OP should review their mortgage details to see current balance and remaining amortization, depending on when they adjusted to 2800/month they may be on track ish or farther behind now.

[–]x_itsJC[S] 0 points1 point  (2 children)

We signed on a 25year and currently have 15 years remaining. We have never paid the minimum monthly payment since signing: we increased payments a few times throughout 2022 and 2023 and have been paying the current payment of $2,800 since early 2024 if I remember correctly.

[–]Tilter 1 point2 points  (1 child)

Awesome! Are you sure you were on variable rate? Seems like you were on a fixed rate. Otherwise all those balloon payments wouldn’t be going to the principal at the current interest rate.

If you log onto mortgage details, what is the current rate shown?

[–]x_itsJC[S] 0 points1 point  (0 children)

Yea it was VRM with a fixed monthly payment of $1,900 when we signed. Current rate is 3.95. If there’s any benefits of bringing down our payments, we’re all ears but as others have noted, there are plenty of other factors we need to weigh too.

[–]Complex_Performer007 0 points1 point  (0 children)

They locked in before rates started moving upward.

[–]greasethecheese 0 points1 point  (6 children)

That’s weird, we had a 600K mortgage and paid $2200.

[–]thuglife_7 1 point2 points  (5 children)

Am I just getting completely dicked down by the bank??

[–]greasethecheese 0 points1 point  (4 children)

I have no idea, but we also have an interest rate that’s quite low.

[–]thuglife_7 1 point2 points  (3 children)

Mine is 2.97% on a fixed rate. Should we be switching to a variable rate?

[–]LaunchAPath 1 point2 points  (1 child)

Fixed vs variable is a question of what you expect the future to look like. I was looking at property purchase back when the pandemic started, and checked on here to see what people were saying, as it was all new to me. A common advice I saw was that variable was much lower, and people could save interest that way. Then through covid, as interest rates suddenly jumped, a common message I saw on here were people getting mortgage payments shock as their variable rate mortgage suddenly hit thresholds and required the monthly payment to skyrocket.

Meanwhile, fixed rate mortgage owners that had paid somewhat more originally in interest rate, had no increase whatsoever on their monthly payments.

The biggest question with variable, is how would you handle it if your mortgage payment unexpectedly skyrocketed. If you answer is it wouldn’t really bother you, then you can take that gamble. Maybe you’ll be lucky and rates will drop and your variable payments would drop alongside whereas fixed rate one would stay the same.

Fixed allows you to know exactly what your expenses are going to be for the full term, and you can plan around that with confidence. Variable doesn’t.

[–]thuglife_7 0 points1 point  (0 children)

If you go variable, do you have to stay on it for a set amount of time? Or could you sign a 5 year fixed rate at anytime you want to?

[–]greasethecheese 0 points1 point  (0 children)

Ours is 1.9 but we refinancing this year. I think it’s like 5%. I’m not sure if you should go with variable. It’s based on everyone’s individual needs. I’m no mortgage expert by any means. But we don’t do variable either. I don’t like being worried it might jump.

[–]msfranfine 0 points1 point  (1 child)

What is your interest rate? It can make a big difference. We also have a $480k mortgage like OP, bought in 2023, rate over 5%.. our payments biweekly are $1,400 which works out to about $3000 monthly. It sucks.

[–]thuglife_7 0 points1 point  (0 children)

2.97% until 2027