mortgage

4 ways to pay off your mortgage early and calculate the savings

Make an extra mortgage payment every year
Make an extra mortgage payment every year | Roberto Westbrook/Getty Images

Make an extra mortgage payment every year

Make 13 payments in 12 months. One way to pull off this tactic is to save 1/12 of a payment every month, and then make an extra payment after every 12 months. The 13 payments a year will slice years from a new 30-year mortgage, Tyson says.

Let's say you do this starting the first month after getting a 30-year mortgage for $200,000 at 4.5 percent. That would save more than $27,000 interest, and you would pay off the mortgage four years and three months earlier.

Minimum payments only
Monthly principal and interest$1,013.37
Years to pay off loan30 years
Total interest$164,813.42
Paying extra
Amount set aside every month$1,345.45
Annual extra payment$1,013.40
Years and months to pay off loan25 years, 9 months
Total interest$137,945.81
Your savings$27,694.54

SEARCH RATES: Start out right by shopping today for a mortgage.

Bankrate's mortgage calculator lets you see how much time and money you save by making a lump-sum payment. Click "Show Amortization Schedule."

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