[nsouth]

I have a 2nd mortgage with a high interest rate and was thinking of paying it off early. I was going to borrow from my retirement which I have to pay back but at a much lower interest rate. Should I try to negotiate the payoff amount at a lower rate?

[Fr_Chuck]

You can try, but of course you have to have both sides willing to negotiate, if they just say no, there is not much negotiation.

[LisaB4657]

They really don't have much incentive to negotiate a payoff amount with you. If you were in a desperate financial situation and upside down on the property they might consider it, since they would want to avoid losing out completely and having the first lender foreclose before they could get paid.

One area in which they might be willing to negotiate is the possibility of modifying the loan to reduce the interest rate, rather than paying it off. Their goal is to make money and they don't make money if you pay off the loan. However they do make money if you continue paying interest to them, even if it's a lower interest rate. So why not call them, tell them that you're going to pay off the loan because the rate is too high, and see if they'll reduce it to the same rate that you would pay if you borrowed from your retirement to pay it off?

[ScottGem]

I think you misunderstand what a payoff amount is. A payoff amount is the principal balance remaining on a loan. So asking if you can "negotiate the payoff amount at a lower rate" makes no sense. You negotiate a lower rate to payoff the loan more quickly. You can try to negotiate a lower payoff balance when there is a danger of the defaulting on the loan.