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Tuesday, December 3, 2024    		 
Household Math™: Which Mortgage is Better?
by Scott Bilker
Scott Bilker
Scott Bilker is the author of the best-selling books, Talk Your Way Out of Credit Card Debt, Credit Card and Debt Management, and How to be more Credit Card and Debt Smart. He's also the founder of DebtSmart.com. More about and DebtSmart can be found in the online media kit.
 
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Test your knowledge by trying to solve this DebtSmart, Household Math™ problem! After you complete the problem, you’ll get the solution and explanation.
 
1.
Scott,
Hi, I am trying to decide whether to refinance my home mortgage (again). We would like to reduce the time to payoff and are considering a 15-year loan at 4.75% APR. We currently owe $166,312 with 341 payments of $1,060 left at 6.375%. The new loan generates 180 payments of $1,293. If I just took the extra $233 and paid it toward my current loan, would I be better off?
--T-Gash (DebtSmart Reader)
4.75% mortgage (180 payments)
6.375% mortgage (with extra $233 in payments)
I don't know!



 

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