Quote:
Originally Posted by MillerTime GFG
To back what Mortgage Made Easy stated in one of his posts...while it does technically make most sense to pay high interest debts if you have them, there's the psychological impact of making noticeable headway on paying down large chunks in principal, even if it's at a low interest rate. Not to mention that a mortgage is generally one's largest debt and would have the highest impact on your monthly cash flow.
For some, the psychological factor outweighs the logical method. It's a savvy strategy for those that maybe aren't as financially savvy.
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Yeah, there's the feel good aspect for sure. When my mortgage rate dropped 2% I left the payment the same. I was used to it and it was nice to see the principal going down faster. I wouldn't be putting extra cash on it though.
You're putting that extra cash to shrink something instead of putting it into something that grows (and at a higher rate). Seeing a saving or investment account grow is just as nice psychologically as reducing your mortgage imo. Even if rates were even, which they're not.