# Wanderlusting Monies

Yesterday I mentioned that I’ve been going through the process of renewing my mortgage. To some, this might be a daunting, boring, or loathsome task. For me, the mortgage renewal process is a time to get my nerd-on. For those not in the know, getting my nerd-on in this case implies spreadsheets. Lots of spreadsheets filled with numbers, and equations, and number filled equations.

Oh Sweet Baby Calculus, so many equations.

Anyway, I sat down and started drafting scenarios – 29 of them to be exact – based on some of the going mortgage rates that I was able to find. You might think I went overboard, but personally I felt 29 scenarios were just enough to make an appropriately informed financial decision that was right for me.

After crunching the numbers, square rooting the inverse polynomial bisector, normalizing the discriminant, and carrying the one1, I opted for a 3.89% fixed rate over 10 years. As I mentioned yesterday, I feel confident that mortgage rates are going to go up. With this in mind, a low rate secured for a longer period of time made sense for me. The alternative – taking a slightly lower rate now for a shorter period, presents the risk of having to renew at a higher rate later, potentially losing the gains I would make with the short-term low rate mortgage now.

A gamble? Perhaps, but a gamble I’m willing to take.

But what does a 3.89% 10 year fixed mortgage really mean?

Well, if my current rate were to remain in effect until my mortgage were completely paid off, I’d end up paying over \$73000 in interest above and beyond what I’ve already paid. Yikes! At 3.89% I only have to pay slightly less than \$60000. That’s a savings of almost \$14000.

Or, in terms that speak to me – \$14000 worth of wanderlusting monies2.

But the savings don’t really end there. Consider that my mortgage payment would also decrease by approximately \$80 per month. Adding that up over the course of the mortgage represents \$19000 in my pocket.

For those keeping track, that’s almost \$33000 worth of wanderlusting monies3.

Of course, being responsible and wanting to get rid of my mortgage sooner rather than later, I’ve decided that I should instead increase my monthly payment by \$804. By doing so, I end up paying the mortgage off in 14 years rather than 20. Combining the savings from paying off the mortgage faster with the overall reduction in interest means that I save almost \$60000. And that, dear friends, is a lot of wanderlusting monies.

1 This is what most people forget to do. Always carry the one. Always. Unless you have to carry something else.

2 Wanderlusting monies – unlike regular monies – are the root of all fun (where fun is measured in shenanigans, adventure, adventurous shenanigans, and shenanigan filled adventures).

3 Of course, my new mortgage requires a few extra payments, so the true amount of wanderlusting monies is about \$5000 less than this – \$28000. Still, that amount of wanderlusting monies can make for a rather sweet adventure.

4 Actually, my new mortgage contract allows 15% top up without penalty, so I’m going to aim for that.

1. Rick says:

I love wanderlusting monies. In fact, I think you should give me said wanderlusting monies. It’s the least you could do.

1. dangillis says:

It is the least I could do. Wait. No. I could also do nothing. Ha!
Seriously though, I feel like I should try to save this money and have an epic travel party.

2. Beth says:

This reminds me – I need to make a a spreadsheet. (Shocking, I know, that I would suggest such a thing). But I need to create a spreadsheet to crunch some numbers and, of course, carry the 1, to demonstrate how my current situation of renting & saving (vs. buying a place) makes more financial, given where I live, the land of the \$1million dollar crack shacks.

Also, I just learned last week how to use the scenario analysis function in Excel. So. Much. Fun!

1. dangillis says:

I actually didn’t know that Excel had a scenario analysis function. Interesting. Something I shall have to investigate.

I heart spreadsheets. In fact, I have so many – for data collecting, scenario analyses, and budget keeping – that it likely borders on pathological.

1. Beth says:

It’s under the “Tools” menu – called “Scenario Manager.” We just used it for something very simple in class, but I think it can be used for more sophisticated things too. I’ll be playing around with it when I get to studying for Finance – I’ll let you know if I find out anything awesome that can be done with it.

1. dangillis says:

Oooooh, I shall have to play with this functionality. Great work bringing forth this information Dr. B. +10000 interwebs to you.

3. instillari says:

Wow, I hate numbers and calculus and all that relates to it, so forgive me for scanning through what you just explained haha. But I wish I could have a love for it like you do. I guess we are all wired differently, huh.

1. dangillis says:

True story. I sometimes worry when I start getting all number-y that I’m going to lose people. But I can’t help myself sometimes. I’m a giant nerd. LOL.

1. instillari says:

lol no worries. It is a part of you, take pride in it 🙂

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