I have a 15 year fixed mortgage at 4.25%. Remaining balance 167.754 due to be paid 8/1/2015. I pay an extra $200 payment towards the principal each month. I'd like to pay the mortgage off in 6-7 years.

With the current low interest rates on ARM's, does it pay to refinance to a 7/1 ARM; could I made extra payments on this type mortgage?

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    Adjustable rate is always a gamble; I'd stick with fixed rate. MOST mortgages allow extra payments, but you need to ask each specific lender about the details of the loan they're offering you. – keshlam Sep 12 '14 at 3:01
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    What do you mean by "167.754 due to be paid 8/1/2015"? Is there a balloon payment due 8/1/2015? – Alex B Sep 12 '14 at 4:19
  • Can you make micropayments to reduce the number of years left on your loan? You don't need to go to an ARM to do this. It also allows you flexibility. – Brian Sep 12 '14 at 13:57
  • @AlexB: That's what I'm assuming. – keshlam Sep 13 '14 at 17:16
  • If you are going to be refinancing you may want to look at refinancing into a lower fixed rate as well. However, given that you are repaying early currently refinancing may not be worth the fees. – rhaskett Dec 12 '14 at 21:59

This really depends on the specifics of your mortgage and your risk tolerance. Some mortgages allow for early repayment without penalty through various means (here in Canada a lump sum equalling 20% of the initial mortgage value is often the maximum). Be sure that you know the consequences of early repayment regardless of which option you choose.

With respect to risk tolerance, rates are unlikely to get much better (the present prime rate of 3.25% is historically a great rate) but they could definitely get much worse in the timeframe we are talking about.

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