Will Paying an Extra 100 a Month on Mortgage Save You Money?
Will paying an extra 100 a month on your mortgage save you money?
Whether you’re considering purchasing a new home, or want to pay off your existing mortgage faster, putting some extra cash towards the loan could make a significant impact on your financial future.
The ol’ payoff
One of the most important benefits of making an extra payment is the amount of interest you save over the life of your loan. For example, a $100 extra payment on a $300,000 mortgage will shave six years off your loan, saving you thousands of dollars in interest payments.
The ol’ get to the point
A good way to save on your monthly mortgage payment is to set up automatic bi-weekly payments from your checking account. This is especially useful if you receive a big income boost during certain months of the year.
The ol’ put the extra funds toward your mortgage
A great way to do this is to pay your entire principal payment in full at the beginning of the year and then start making bi-weekly payments to reduce your monthly balance. Many banks offer this service.
The ol’ put in the big scheme of things
When it comes to paying down your mortgage, the small stuff is just as important as the large stuff. A simple online calculator will show you how much an extra mortgage payment will cut down your overall interest bill.
The ol’ get on the move
A small increase in your income can be enough to pay off your mortgage and give you more breathing room in your budget for other important matters. For example, an extra $100 per month can allow you to buy a nicer car or pay for college tuition for your children. This will help you to achieve your long-term financial goals and provide a much-needed sense of accomplishment as you near retirement.
