“Thank you guys for proving to me that my idea doesn’t work with today numbers. I guess if one would have done it 2 years ago, one would be sitting pretty right now. Considering 30 year fixed back then was around low 5% and savings rate now is low to mid 5%. But obviously, past return is no guarantee for future earning, so we’ll just have to wait another 2 years to see if it would have worked or not.”
asianautica,
There’s nothing wrong with you idea. It can work, just not with the numbers you were using. We discussed this in an earlier post. I currently have loans from ’03’, ’04’ that are 3.75%(IO adj.), 4.75%(15yr fixed) and I’m currently paying the minimun and putting money aside into a CD. The 3.75% IO loan will reset in 2 years, which at that point I will put a large chunk of the CD money into the principal.
