![]() The best option depends on how much extra you’re willing to put toward the loan and how quickly you want to pay off your home loan. There are multiple repayment strategies for owning your home outright sooner. Be sure to check with your lender to verify there are no prepayment penalties. This is the amount you’ll apply to your loan principal. Decide how much your extra payment amount will be. You can increase your extra payment amount or frequency as your finances improve. Decide between making monthly contributions or a single lump sum payment. This is different from your annual percentage rate (APR), which includes additional loan expenses, like mortgage insurance and discount points. List your current mortgage interest rate. The most common mortgage terms are 15 years and 30 years. Enter the number of years of your purchase loan. If you’re refinancing or already making repayments, include your minimum monthly mortgage payment, excluding taxes and insurance. Monthly interest and principal payments.If you’re refinancing or already making repayments, list the outstanding mortgage principal that needs to be repaid. This calculator won’t factor in private mortgage insurance or similar premiums. With a purchase loan, input your down payment amount as a percentage. If you have a purchase loan, input the price you paid for the home. ![]() Choose “refinance” if you’re getting a mortgage refinance or keeping your current loan. Choose “purchase” if you plan on buying a home and making extra payments immediately. 360 months.How To Use the Additional Payment Calculatorīelow is a detailed summary of how to enter the appropriate loan information for a new or existing mortgage: 1Īmortization extra payment example: Paying an extra $100 a month on a $225,000 fixed-rate loan with a 30-year term at an interest rate of 3.875% and a down payment of 20% could save you $25,153 in interest over the full term of the loan and you could pay off your loan in 296 months vs. Use this amortization calculator to help you determine how many months it could take to pay off your loan with or without making extra payments.Ĭonforming fixed-rate estimated monthly payment and APR example: A $225,000 loan amount with a 30-year term at an interest rate of 3.875% with a down payment of 20% would result in an estimated principal and interest monthly payment of $1,058.04 over the full term of the loan with an Annual Percentage Rate (APR) of 3.946%. What is the effect of paying extra principal on your mortgage?ĭepending on your financial situation, paying extra principal on your mortgage can be a great option to reduce interest expense and pay off the loan more quickly. It also shows total interest over the term of your loan. An amortization schedule shows how much money you pay in principal and interest. But, over time, more of your payment goes towards the principal balance, while the monthly cost or payment of interest decreases. With a fixed-rate loan, your monthly principal and interest payment stays consistent, or the same amount, over the term of the loan. Find a financial advisor or wealth specialistĪmortization is the process of gradually repaying your loan by making regular monthly payments of principal and interest.
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