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Old 09-04-2008, 09:16 AM
Dr_Jim Dr_Jim is offline
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Location: harrisonburg, va USA
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Default Payin extra towards principal..How much is loan term affected?

Greetings,
I have what should be a basic question, yet I simply don't understand the math.

I have a home with a 296K mortgage, 30 yr fixed. Payment is $2100 a month.

If I were to pay....say an additional 1K a month towards the principal how much sooner would that pay off the loan?
Is there a formula or such I could use to determine what various amounts towards principal would do to the loan term?

Thanks for any help.........
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Old 09-08-2008, 11:58 AM
alex@borrow123.com alex@borrow123.com is offline
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Location: Gaithersburg, MD USA
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Default Re: Payin extra towards principal..How much is loan term affected?

Hi Dr Jim, I can help ya out. How much is the interest rate?

Regardless, of what the actual numbers are, paying an extra $1000 towards your mortgage would help tremendously and cut out a lot of interest and you should pay off the mortgage a lot earlier than making the minimum payment.
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Old 09-08-2008, 10:11 PM
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GarySpicuzza GarySpicuzza is offline
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Default Re: Payin extra towards principal..How much is loan term affected?

Source LINK.

If the $2,100 payment represents only principal and interest the rate would be 7.65% for a 30 year fixed loan.

Paying an additional $1,000 per month in principal would shave 17+ years off your loan. Your home would be paid for in 13 years and you would save almost $300,000 in interest!

Monthly Payment: $ 2100.16
Total Interest:$ 460058.46(No pre-payment)
Total Interest:$ 460058.46 (As given)
SAVINGS: $ 0.00 Total Interest Saved, 0.00 Years shorter loan
2008 Interest $ 22552.38
2009 Interest $ 22342.43
Ending Balance Dec 2009: $ 290490.91
Average Interest Each Month: $ 1277.94


Monthly Payment: $ 3100.16
Total Interest:$ 460058.46(No pre-payment)
Total Interest:$ 161713.36 (As given)
SAVINGS: $ 298345.10 Total Interest Saved, 17.67 Years shorter loan
2008 Interest $ 22122.56
2009 Interest $ 20927.67
Ending Balance Dec 2009: $ 264646.33
Average Interest Each Month: $ 449.20
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