[quote=HLS]With your calculation, you are just averaging your remaining interest expense over 3 years.

Don’t forget that you are paying interest on a declining balance each month.

If you go to an amortization website that shows a breakdown you will see exactly how much your interest expense is.

The interest that you paid this month is much more than the interest that you will be paying next year.
Your payment is the same so more will go to principal.

Does this make sense ?
Each month your interest portion of your payment is based on the principal balance for the previous month.[/quote]

I understand that. But I was looking at it from the perspective of if it made sense to pay if off the $75k now or not. It seems like if I pay if off now, I’m saving only $2750 in interest charges that is spread over 3 years and that gradually amortizes down. But if I leave the $75k in a X% return account (at least) for the next 3 years, it’s still better than paying it off right now.

I guess my real question is starting with $75k in some investment, how do I find the rate of return X% needed in order to “break even”, if I plan to withdraw from that $75k monthly to pay the remaining mortgage. I was thinking 2% was more than enough.