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About 7 years ago, I found an ARM structured as a 10/1, with the first years interest-only at 2.85%, then floating with a cap of 4.85%. (I think I paid $1500 to lower the mortgage maybe a quarter point or so, but I forget the details.) Altogether, we slashed our payments by over half.

My thinking was:

1) The savings we put into retirement accounts.
2) By year 7 (now), we'd both be 65 and thinking about whether or not we'd be moving.
3) If interest rates dropped, so would our payment.
4) If interest rates grew, we'd look at what our current mortgage offered & refi if needed or just pay off the loan through our savings. (The savings from the loan wouldn't itself be enough, but it'd be close enough for us to pull cash and pay the loan off.)

- We have a ton of equity in the home.
- The values of the homes in my area is exploding.
- We have very good retirement savings; the loan just gave us another way to save.
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