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Increase Mortgage Payments Above Minimum

Posted By Jim On 04/09/2007 @ 1:52 pm In The Home | 11 Comments

If you had a 30 year fixed mortgage of $300,000 at an interest rate of 6.00%, you’d pay $1,798.65 each month or a total of $647,515.44 over the life of the loan. That’s $347,515.44 in interest over 30 years, or about $10,000 in interest each year (given amortization, you pay more of that interest in the beginning of the loan but the principle still applies).

What if you paid an additional $50 a month? You’d shave $29,211.36 off your total payout (this includes the extra $50 a month) and close out your mortgage 25 months early.

What if you paid an additional $100 a month? That’s a savings of $53,346.83 and be done 47 months early – nearly four years.

If you opted to send an even $2000 check each month (an extra $201 payment), you’d save $91,499.07 and close out the mortgage in 279 payments – or 82 months early.

Want to see your particular situation? Put the numbers through this mortgage loan calculator at Dinkytown.net [3] and see for yourself. It makes a huge difference if you are able to do it.


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[3] mortgage loan calculator at Dinkytown.net: http://www.dinkytown.net/java/MortgageLoan.html

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