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jeribrav · Joined: 24 Aug 2011 Posts: 1 1.48 Dollars($)

I am 52 years old and bought a house in May last year... $400,000 30 year fixed rate mortgage at 5.350%. I want to pay the mortgage off early by making additional principal payments each month, and so I have added an extra $100 to each payment since my first payment in June 2010. I want to increase that additional principal payment by another $100 every year (so for June 2011 I added an additional $200 to my payment, and in June 2012 I will add an additional $300 to each payment, and so on).

If I continue to increase my payment another $100 every year, when will my mortgage be paid in full? I can't retire until I don't have a house payment. I can't find an online calculator that will do this for me, since I want to increase my additional principal payment by $100 each year. Thank you for reading!

adonis · Posted: Wed Aug 24, 2011 8:03 pm Post subject:

Hi jeribrav,

You can check out the given calculator for the same:
http://www.mortgagefit.com/calculators/extra-payment.html

sabrinatoss · Posted: Thu Aug 25, 2011 2:32 am Post subject: hi jeribrav !

If you don't find a calculator for your specific needs why not try to get a consultation from a mortgage broker since they are considered as experts which is quite helpful on giving you the best advice on your loan problems.

Posted: Thu Aug 25, 2011 8:05 am Post subject:

It's a very simple calculation but what you proposing to do doesn't fit many "stock" calculators on the Internet. Interest is charged on the prior month's balance with the differance in P&I payment going to principal. Just jot down a spreadsheet worksheet with the sequence of additional principal payments in an additional column. Better yet, have a LO forward you a copy -- most all LOs have something similar in their PCs.

Posted: Thu Aug 25, 2011 9:41 am Post subject:

If your interest rate is 5.35% (unusual number - make sure you're not using APR. P&I should be $2,233.65 at this note rate), you'll payoff April Fool's Day 2027. With a rate in the 5s, you should look at refinancing also.

jimgilly · Posted: Fri Aug 26, 2011 3:52 am Post subject:

What is the loan balance and what are your credit scores?

If you're credit scores are high enough and you've got enough equity you should be able to refinance and do a lot better than the interest rate you currently have.

If that is the case, you might want to consider a 20 year fixed rate loan at around 3.875% with low closing costs and a monthly payment around what you are currently paying. Any extra principal payments along with the lower interest rate, would build equity faster while greatly shortening the duration of the loan.

jveenstra · Posted: Mon Aug 29, 2011 10:58 am Post subject: Pay extra

If you pay $100 extra every 12 months, the $400,000 loan will pay off in 203 months
The last 11 months you will be paying $3,933

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Calculating payoff date when making additional principal payments

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