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In 5 years you should have large portion of principal paid off so this would not matter. Average 30 year mortgage is paid off in 11 years.
by KptMarchewa 3y ago
In 5 years you should have large portion of principal paid off so this would not matter.
Average 30 year mortgage is paid off in 11 years.
- helij 3y agoReally interesting. Is it because people sell the property and get a new mortgage for a new place or they outright pay it off after 11 years?
- quickthrowman 3y agoIt is the former, very few people are paying off their entire mortgage in 11 years.
- rsync 3y agoIn recent decades Swiss and Nordic societies have dealt with rising home values with 50 year mortgages and interest only products that are barely recognizable to US home buyers. Many Swiss have fairly dangerous interest rate exposure (to the SNB) based on the assumption that it will continue selling francs to keep exchange rates more competitive, etc. That will be true … until it isn’t…
- quickthrowman 3y agoThe average duration of a 30 year mortgage being 11 years is due to refinancing or moving, it’s not due to large amounts of borrowers paying their debts early.
- bhelkey 3y agoIn a thirty years fixed mortgage, each payment includes a portion to paying down the principal and paying interest on the remaining principal. In the beginning of the mortgage, the principal is higher, thus the interest portion is higher. In the first five years of a thirty year mortgage, a very small percentage goes towards the principal. Assuming a thirty year fixed rate mortgage and a 7.5% interest rate, less than 15% of the mortgage payments in the first five years go to paying down the principal [1]. [1] https://www.bankrate.com/mortgages/amortization-calculator/ https://www.bankrate.com/mortgages/amortization-calculator/