That is a crazy argument. Most people spend their paychecks occasionally. Assuming you regularly keep 2 months salary in your bank account I think $16000 is a fair number for calculations.
$500000 mortgage at 2.5% interest is a monthly interest payment of $1042
$500000 mortgage less the $16000 leaves $484000 at 3.5%. Your new interest payment is $1412.
The interest rate makes far more difference than any slight reduction in your account balance.
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