I agree with you but have found that in my own situation the optimal mortgage length is 15 years. I don't really like lump sum payments but my mortgage has flexibility to bump my mortgage payment by up to double. I like to bump the payment up by $50 every few months and maybe a bit more if I get a raise. I don't notice the difference monthly but at the end of the month the bank estimates the new length of my mortgage and you can see it go down. The returns of this strategy diminish though and I have found a psychological barrier at about 15 years. Once I increased my payments enough to knock 10 years off my mortgage I found that the payment increase required to knock off the next year is more than I was willing to spend.
I think everyone with a mortgage should spend 5 minutes with an online mortgage calculator to figure out how much they would have to increase their payments to knock off the final year of their mortgage. The last year is pretty easy to eliminate.
|