Understanding the 10/15 Rule: A Strategy to Pay Off Your 30-Year Mortgage
Friday, 13 September 2024, 07:25
What is the 10/15 Rule?
The 10/15 rule involves making an additional payment of 10% of your monthly mortgage every week. Applying this rule aims to minimize the total interest paid over the life of a 30-year mortgage.
Benefits of the 10/15 Rule
- Reduced Interest Costs: Paying down the principal faster saves thousands in interest.
- Financial Freedom: Reducing your mortgage term can lead to earlier financial independence.
- Improved Equity: More frequent payments build up your home equity quicker.
Considerations Before Adopting the 10/15 Rule
- Financial Stability: Ensure your budget can handle increased payments without strain.
- Prepayment Penalties: Check if your lender imposes fees for early repayment.
- Opportunity Costs: Evaluate where else your money could be invested.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.