Post by High Priestess on Sept 25, 2017 22:07:01 GMT
I was interested to see how much I would save, depending on how much extra I paid towards my principal on my monthly mortgage payment. Here's an accelerated repayment calculator that I found. By paying extra each month, it's possible to reduce your overall interest payment and also finish paying off your loan faster:
In my case, (with 18 years to go on a 30 year loan, not having paid very much extra up to now) I found that by paying an extra 7% each month, I could save 3.7% on the total payments, and finish paying the loan 2 years earlier. If I paid an extra 17% each month, I could save 7.7% on the total payments, and finish paying the loan almost 5 years early.
Also, the folks providing this calculator also made the point, which I hadn't considered, that by paying extra you increase the equity on your home and then have that amount to take out as a loan down the road should you need it.