Have you ever heard that you can chop years off your mortgage just by paying a little extra each month? Well, it's true! Let me show you how you can calculate your savings resulting from extra payments on your mortgage.
For this example, I'll be using DecisionAide.com's Mortgage Prepayment Calculator. Let's say you have $100,000.00 remaining on your loan. You've owned this place for 1.5 years and so you've got 28.5 years left on the mortgage. Your interest rate is 6.5% and you make payments every month.
1. Enter 100000 as the loan amount in the first box
2. Enter 6.5 as the interest rate in the second box
3. Now, you need to figure out how many months are remaining on your mortgage. 28.5 years * 12 mos./year = 342 months. So, enter 342 for the third box.
4. Most likely you make payments every month. So, enter 12 for the fourth box.
5. Now, if you'd like to know what adding $200 / month will do for you, setup the first line of extra payments like this: Monthly | 200.00 | 1 | Until End of Loan | [leave this blank]
Now click "Display Extra Pmt Benefits." You will see that an extra $200 /mo. will result in a savings of $59,379.04 and shorten the length of the loan by 151 months (12 years and 7 months)!!
For this example, I'll be using DecisionAide.com's Mortgage Prepayment Calculator. Let's say you have $100,000.00 remaining on your loan. You've owned this place for 1.5 years and so you've got 28.5 years left on the mortgage. Your interest rate is 6.5% and you make payments every month.
1. Enter 100000 as the loan amount in the first box
2. Enter 6.5 as the interest rate in the second box
3. Now, you need to figure out how many months are remaining on your mortgage. 28.5 years * 12 mos./year = 342 months. So, enter 342 for the third box.
4. Most likely you make payments every month. So, enter 12 for the fourth box.
5. Now, if you'd like to know what adding $200 / month will do for you, setup the first line of extra payments like this: Monthly | 200.00 | 1 | Until End of Loan | [leave this blank]
Now click "Display Extra Pmt Benefits." You will see that an extra $200 /mo. will result in a savings of $59,379.04 and shorten the length of the loan by 151 months (12 years and 7 months)!!
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