- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
re: Another question regarding paying down your mortgage...
Posted on 10/6/12 at 6:38 am to OnTheBrink
Posted on 10/6/12 at 6:38 am to OnTheBrink
Sigh. It helps if the mortgage calculator you are using recalculates interest. 
Glad I noticed this now.
Working with a good one now, on a $100K loan, paying an extra $1K towards principal would knock 4 payments off the end and save about $2K in interest over 30 years.
Say you wanted to turn that 30 year mortgage into a 15 year mortgage. On a $100K loan at 5%, paying an extra $255 a month would accomplish this. This would be roughly paying $46K extra over 15 years to save $51K in interest on the loan.
Doing it continuously over the course of years will save you some money. The better question is, could you earn more money investing that extra principal payment over 30 years vs putting it towards your mortgage to save on interest? With the low mortgage interest rates today, more than likely you will. Depending on how you invest it, you could also have immediate access to the cash for emergency purposes.
ETA: Changed mortgage calculators :banghead:
Glad I noticed this now. Working with a good one now, on a $100K loan, paying an extra $1K towards principal would knock 4 payments off the end and save about $2K in interest over 30 years.
Say you wanted to turn that 30 year mortgage into a 15 year mortgage. On a $100K loan at 5%, paying an extra $255 a month would accomplish this. This would be roughly paying $46K extra over 15 years to save $51K in interest on the loan.
Doing it continuously over the course of years will save you some money. The better question is, could you earn more money investing that extra principal payment over 30 years vs putting it towards your mortgage to save on interest? With the low mortgage interest rates today, more than likely you will. Depending on how you invest it, you could also have immediate access to the cash for emergency purposes.
ETA: Changed mortgage calculators
:banghead:This post was edited on 10/6/12 at 8:34 am
1
Posted on 10/6/12 at 11:26 am to jguidroz
quote:
The better question is, could you earn more money investing that extra principal payment over 30 years vs putting it towards your mortgage to save on interest?
Yes, paying extra does get you some but at today's rates it's only 2.5% or so after tax. Why lock up your money for many years at that rate, especially if inflation goes up at all?
Historically this was a good idea, b/c rates were higher. If you had a 6.5% note instead then it would be much more worth it. That would be a guaranteed 5% after-tax return, that's actually not bad. But today's rates are so it just isn't worth it.
Page 1 of 1
Popular
Back to top
Follow TigerDroppings for LSU Football News