Mortgage Killer Accelerator

Strategy 1 of 107

Refinance lower, keep paying the old payment

Most predictableFrom a lower cost of the same debt

What it is

Get refinance quotes when market rates sit well below your note rate.

Steps

  1. Get refinance quotes when market rates sit well below your note rate.
  2. Refinance the balance; do not take cash out.
  3. Keep paying your old payment. Everything above the new required payment goes to principal.

Repeat: Each time rates fall far enough to cover the closing costs.

Measure: Months to payoff at the old payment and the new rate, against the closing costs.

Try it in the calculator Enter its amount in "New rate, same payment". Add a payoff goal of 5 years to see what is still needed.

Risks

  • Closing costs can take years to earn back.
  • Restarting a new 30-year term and paying only the new minimum undoes the benefit.

Who it fits

Average household, Higher earners, Higher net worth, with assets, Business owners, Newlyweds, Married couples, College students, Single, Grandmas and grandpas (62 and over), No high school diploma, No college degree

Needs

Any homeowner with a mortgage.

How predictable

Most predictable: once in place, the payoff date is arithmetic

A worked example (hypothetical, not guaranteed)

Picture a hypothetical household (average household). They owe $300,000 at 6.5% with 30 years left. The required payment is $1,896 a month, and that payment, which comes from income, never changes in this example.

They follow the steps: get refinance quotes when market rates sit well below your note rate.

Suppose it brings a new rate of 5.5% while they keep paying the old $1,896 payment. The loan would be paid off in 23 years 7 months instead of 30 years, saving about $147,106 in interest. To finish in five years, they would still need about $3,834 a month more from other strategies. That is why the five-year sequences stack several at once.

The amount above is chosen only to show the arithmetic. It is not an estimate of what this strategy will produce for anyone. Put real numbers from the fact finder into the calculator.

Sequences that use it

  • Two-income couple cycle: Reset both W-4s, roll each ended debt into principal, refinance when rates drop, recast after windfalls.
  • Most predictable stack (no markets, no tenants): Every step is fixed arithmetic once it is in place. This is the closest thing to a sure payoff date: still not guaranteed, because income, rates offered and family gifts can change.

Sources and more information

Where to get help

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