So in June we refinanced from a 2.875% 30 year fixed rate mortgage to a 2% 7/1 adjustable rate mortgage. Previously in September we had a 3% 7/1 adjustable rate mortgage that we were given a free fix rate when we were about to refinance.
So how's it been going? Well we were paying in May $2035 in interest and $1808 Principal. Now we are paying $1405 in interest and $1717 in principal. We are saving $720/month in payments most of it interest. I have saved it for 4 months and October 1st I'll transfer another $720 to our index fund VIOO. VIOO is a small cap index fund. I thought something broad but risky.
Sadly we are actually down and losing 1.4% on VIOO. But until we sell, refi, or pay off the house I'm curious if I can get ahead by keeping on investing the difference in payments. Trust me I've been tempted to not save it but I'm curious. We've been on a pretty "tight" budget and sticking to it has been hard. But moving the $720 on the first of every month seems to be working. Let's see how a year goes. It's a dollar cost averaging strategy into a risky sector index fund. But it's a low cost and broad sector index at the same time.