Everyone knows that low interest rates will reduce your monthly payments but another even more important bi-product of these ultra low interest rates is what it’s doing to your principal payment each month. I strongly suggest my viewers go to www.calculator.net and go to its mortgage calculator. Play around with the numbers… take a look at what 1.19% interest on a $820,000 mortgage does to your principal vs interest ratio over the next 25 years. Now plug in what 5 or 6% interest does to that ratio… It’s shocking. Our current record low interest rates on mortgages is doing a tremendous amount of damage to the principal balance starting from day one. 3 out of every 4 dollars paid is coming straight off the principal. When interest rates were at 4.5 or 5% it’s the reverse 3 out of every 4 dollars was going to interest.