Paying off early

Forum|Forum|7 years ago
March 29, 2019
3 replies
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If I was to pay $20 extra each month on a 30 year mortgage how much quicker would I pay it off?

NCPERSON1

it depends on the current mortgage balance, the interest rate and the remaining term.

there are plenty of website with mortgage calculators where you can determine the answer to your question

MortgageHustler88

Employee

Say you were to have a $150,000, 30 year Mortgage at 4.5% interest starting first payment on 4/1/2019 and you make $20 extra principal payment each month, you’ll only cut it down by 18 months, or 5% savings, but if you put down $100 extra you’ll cut off almost 7 years of your loan and save almost $30,000 in interest over the period.

Bees

Employee

Here is an example of a calculator that adds in extra principal payments. https://www.mortgagecalculator.org/calculators/what-if-i-pay-more-calculator.php Paying extra in the first few years can really make a difference in the length of loan.

Disclaimer: Not a tax professional. Information gathered from internet links. Anything dated in June 2019 was posted in prior years and is before the 2019 limits and changes.