Originally Posted by
silver4300
Not sure about the OP, but I have a $100,000 loan. 1% annual would be $500 per six months.
In the last six months:
Chase Ink Business: $600
Southwest Business: 50,000 pts. X 2 for companion pass = $1,000
Southwest Personal: 50,000 pts. X 2 for companion pass = $1,000
Barclay Arrival: 44,000 pts = $440
Capital One Venture: 50,000 pts = $500.00
Amex Blue Cash Preferred: $200
That is over $3,700 worth of cash and travel bonuses in just the last six months.
That's why I specified 15-30 year loan. I'm also from southern california, where a 100K loan is maybe enough to redo your kitchen and bath, not buy a house. But that was an assumption on my part.
Even with a 100K loan:
4.25% = $77,098 in interest paid
4.50% = $82,407 in interest paid
So the cost of a quarter-point interest penalty over 30 years on a $100K loan is $5309. Make it a 1% penalty and it becomes $21,695. Make it a $350K mortgage (for us SoCal folk) and it becomes $75,933.
I guess the moral of the story is, do your homework, run the numbers, and evaluate your risk tolerance. For me, in southern california, I am going to be beyond careful.