I recently bought a home, and got a 30yr fixed rate mortgage on 290,000 at 4.5%.
Now, I'm receiving a bonus from work to the tune of $10,000.
I've got a small Vanguard investment account (~$25,000), pretty well balanced between total market index funds and bonds.
My question: is it smarter to throw that chunk of money at the mortgage now, since my payments are mostly interest? Or does it make more sense to invest that $10,000 because I'm likely to get better than 4.5% return in the long run?
Amortization calculations say that an extra 10,000 now would knock two years off the mortgage payments and about $17,000 off the total interest paid. Thoughts?
