How Much Interest do I Save by Paying Extra Towards my Mortgage?

How often do we make a 30-year commitment? A partner? Our children? A career? For majority of us, 30 years sounds like an eternity. In terms of purchasing a home, a 15-year loan is a bit more comforting over a 30-year: lower interest rates, and of course, cutting the time frame of paying off your mortgage in half. On the flip side, the downfall of a 15-year fixed mortgage is committing to the higher monthly payments. “What if I can’t pay it?” is a common worry in case an event occurs, and the homeowner cannot pay their mortgage. For many home buyers, a 30-year fixed mortgage is the safest bet, even though they trade a lower payment to more interest overtime and double the commitment.

Sure, a longer commitment and more interest sounds terrible when you say it out loud or read it on paper, but what if we told you, you made a smart choice: treat your 30-year fixed like a 15-year fixed and save money in interest by paying your mortgage off sooner.

We aren’t talking large sums of money each month here, either. You’ll be pleasantly surprised with how much interest you can save by paying $200, $100, or even just $50 extra per month. Using a generic loan scenario, let’s show you the numbers! (Don’t worry, we’ll keep it simple and skip the ridiculously long math equation 😜)

Here is an example loan scenario:

Loan amount: $300,000

Interest rate: 4.75%

Term: 30 years

If you pay $200 extra per month…

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If you pay $100 extra per month…

Click here to download Real Estate Tips for Beginner Investors by Talia Ramos, a successful independent Chicagoland real estate investor.

If you pay $50 extra per month…

Click here to download Real Estate Tips for Beginner Investors by Talia Ramos, a successful independent Chicagoland real estate investor.

Please note that your numbers will vary depending on your specific loan; the above example is used for reference only.

If a rate/term refinance is not beneficial for you at this time, you can get on your own payment plan to save $1,000’s in interest!
Speak to a mortgage consultant to help you set up a plan that works for you!

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Anthony Cummuta

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