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Prepayment Calculator

Should You Prepay?


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DO YOU HAVE SOME EXTRA CASH?
Should you invest it or use it to pay down your mortgage? Look at it this way: When you prepay part of your mortgage, you end up paying less in interest. But you also lose part of your mortgage-interest tax break. Your true savings, then, can be expressed as the difference between your mortgage interest rate and the rate at which you take your deduction (a function of your total marginal tax rate). If that net percentage figure is less than the amount you could make investing the cash, you may be better off investing it.



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