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How hard is it to pay off your Mortgage early? It may be far easier, or, to put it another way, far less "painful" than you think!
Lets look at some calculations, based on a mortgage loan amount of $150,000.00.
First, a 30 year Mortgage, at 4% interest, with payments starting March 21,2013.
Payment monthly, $716.12, pay off date March 21, 2043.
Now lets take that same loan, and pay one extra payment each March of $716.12 for the duration of the loan.
New pay off date March 21, 2039. By paying one extra payment a year, your mortgage will be paid off 4 years early.
Another way to make it easier to pay that extra payment, and save even more on the Mortgage, is to divide the extra one time a year payment into equal amounts, and pay extra each month.
Take the original payment of $716.12, and divide it over 12 months, in this case, we calculated $59.68 extra each month on your mortgage, for a total of $ 716.16 paid extra each year. This makes it easier to pay ahead on your mortgage than coming up with an extra mortgage payment all at one time. Your pay off date now changes to February 21, 2039.