Trying to apply some Think Fast, Think Slow to this. If you have two mortgages on two properties the fast thought on extra principle payments is pay off one first use the increased cash flow to pay the second one off. But thinking slow by alternating paying them down you increase the amount of the base monthly payment that goes to principle. Or perhaps pay one down to the point that 50% of the monthly goes to principle then focus on the second mortgage.
Variables - interest rates, ARMS, tax deductions, increased cash flow, PMI, other investment opertunities would all effect the best option. I want to keep the problem simple with same interest rate and amounts.
Parameters:
2 mortgages, both $150K, at 5% interest, 30 year fixed. Have $3,000 extra a month to apply to principle. What is the best way to reduce the amount of interest payed? Is that also the fastest way to pay both off?
Any good number crunchers out there? Thoughts?