Homeowners with low-interest rates are rushing to pay off their mortgages faster, despite the financial advice to hold onto them. Christopher Price, a financial planner, believes that if one has a mortgage rate of 2.5 percent, it is financially prudent to pay it off slowly over time.
However, recent data indicates a different trend. Nearly one in four homeowners are currently choosing to accelerate their mortgage payments. Surprisingly, those who would benefit the most from this approach are not the ones taking advantage of it.
“Financially speaking, if I have a 2.5 percent mortgage, I would rather pay them as slowly and as long as I can,” says financial planner Christopher Price.
This information comes from Rocket Mortgage, a major lender. The company analyzed early payments on close to 3 million loans across all 50 states over the past five years. The findings reveal the counterintuitive choices some homeowners are making despite historically low interest rates.
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