Invest vs Recast to hit 20% Equity

I'm in my early 30s and bought a ~$700k home with 10% down and a 6.5% fixed-rate mortgage. Putting another $65k toward the principal and recasting would bring me to 20% equity and lower my payment by about $485/month. Would you prioritize the lower monthly payment and interest savings, or invest that $65k in an S&P 500 index fund instead? I'm trying to decide which makes more sense over the long term.

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u/PleasantRuin7989 1 6 hours ago

Does that $485 include the PMI disappearing or is it only the recast payment?
u/Alternative-Ask8134 1 6 hours ago

Recast frees up cash flow now and that guaranteed 6.5% return on your money is hard to beat. Market might do better some years but it can also drop 20% while you're still paying PMI. I'd knock out the PMI and take the lower payment, then dollar cost average the savings into the market each month.