I opened some mail today from the bank that holds our home equity loan. You may recall me mentioning last September that the 5 years of no interest payments were up and now the terms were that the new monthly payment is 1.5% of the outstanding balance. So, my payment went up from $400 a month to almost $900. That's ok though because all that extra is going towards principal. Each month my principal balance goes down about $500 and each month that 1.5% monthly payment drops a bit, too.
The interest rate is 7.85% (I know OUCH!). The letter that came in the mail today said effective 1/31 the interest rate on this loan is dropping to 4%!!!!!!!!!
That is almost half. I was in my car when I opened the letter. I was dancing in my seat!
It won't make my monthly payment go down a whole bunch, BUT instead of now almost $400 a month interest it will be around $200 and that extra will also go towards principal. WOOO!! I plugged the new interest rate in my amortization schedule spreadsheet and in less than 5 years I will save over $8000 in interest. Of course that's if we actually stayed here that long, which isn't very likely, but still super news for me each month until then.