The compound interest you don’t see: Why your low mortgage rate is worth more than you think
Most people hear the term compound interest and think about savings accounts or investment returns. But there’s another, lesser-known side of the coin: compound savings — the money you keep in your pocket because your debt costs are low.
And if you have a low mortgage interest rate, you’re experiencing it every single month.
The Magic of a Low Interest Rate
Let’s say you bought your home in 2021 and locked in a 2.75% mortgage. Compared to today’s average 7% rate, that’s not just “a good deal” — it’s a financial asset in its own right.
Over the life of a 30-year loan, that lower rate can mean hundreds of thousands of dollars in avoided interest payments.
Here’s what that looks like over time:
That green line? That’s you with a low-rate mortgage. The red line is what you’d pay if you refinanced into today’s rates. The difference isn’t just big — it compounds every month.
The Problem: Your Equity is Stuck
Here’s the catch — many homeowners sitting on historically low rates also have a lot of equity trapped in their home. If you sell or refinance, you’ll almost certainly lose that low rate. Suddenly, the compounding advantage disappears.
So you face a frustrating choice:
- Sell or refinance → access your equity now, but give up your low rate (and start paying more interest).
- Stay put → keep your low rate, but keep your equity locked away.
The Home Appreciation Partnership (HAP) Solution
With a Home Appreciation Partnership (HAP) through Bonus Homes, you don’t have to choose.
Here’s how it works:
- Bonus Homes pays you the net value of your equity — often in as little as two weeks.
- You keep your name on the title and your low mortgage rate intact.
- Bonus Homes covers property expenses while you share in future appreciation when the home eventually sells.
In other words: you unlock liquidity and keep the compounding savings your low mortgage rate provides.
Why This Matters in the Big Picture
Think of your low mortgage rate as an investment that pays you every month — not in dividends, but in avoided costs. The longer you hold it, the more that benefit grows, just like compound interest in a bank account.
By pairing a low rate with a HAP, you can:
- Maintain your “hidden” compounding advantage.
- Access equity without new debt or higher monthly payments.
- Still participate in future home price growth.
Final Thought
In personal finance, people often talk about “not touching the principal” in an investment to let it grow. With a low mortgage rate, your principal is your loan terms. Changing them can erase decades of compounding benefits.
A Home Appreciation Partnership with Bonus Homes offers a rare way to have it both ways — unlocking your equity today while keeping the financial magic of a low mortgage rate working for you tomorrow.
