mortgage

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

Make an extra mortgage payment every year

Paying extra from the get-go

You get a 30-year mortgage for $200,000 at 4.5%, and you add an extra 1/12th of a month's principal and interest to each monthly payment, starting the first month. Doing so pays off the mortgage 4 years and 4 months earlier, and saves more than $27,000 interest.

Monthly paymentYears and months to pay off loanTotal interest
Minimum monthly payments only*Monthly payment: $1,013.37Years and months to pay off loan: 30 yearsTotal interest: $164,813.42
Paying 1/12th extra P&I each month from the beginningMonthly payment: $1,345.45Years and months to pay off loan: 25 years, 8 monthsTotal interest: $137,118.88
Savings: $27,694.54

* 4.5% interest rate

Make an extra mortgage payment every year

12 months, 13 payments. There are a couple of ways to pull off this tactic. You can save up throughout the year and make an extra payment. Or, for those who get paid biweekly, harness part or all of those "extra" or "third" checks.

The equivalent of 13 payments a year will slice years from a new 30-year mortgage, Tyson says.

Bankrate's mortgage calculator lets you see how much time you can shave off by making an extra payment each year. Click "Show Amortization Schedule."

RATE SEARCH: Shop today for a mortgage refinance.

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