will making one extra payment per year on a 30 year mortgage reduce the repayment schedule by almost half?
how about making 2 per year?
- John GLv 41 decade agoBest Answer
Making an extra payment or two per year, every year won't knock the repayment schedule by half, but it will definitely shorten your repayment schedule by a lot.
For example, lets figure you have a $200,000 mortgage and have a 7% interest rate. Your monthly payment would be $1330.36, and you would have it paid off September 26, 2037. Now if you added just one payment of $1330.36 per year, your payoff date would then be September 26, 2031. Making two extra payments of $1330.36 would shorten your payoff date even further to December 26, 2027! It's DEFINITELY worth it to throw as much extra money as you can to pay off your mortgage early!Source(s): Bankrate's Amortization Calculator - http://www.bankrate.com/brm/amortization-calculato...
- bdancer222Lv 71 decade ago
You don't need to sign up and pay $300 or $400 for the privilege of bi-weekly payments -- which results in a 13th payment each year.
You can add any amount you want to your monthly mortgage payment, earmarked as principal. Even $10 per month will shorten the term.
- postal pLv 71 decade ago
I believe the bi-weekly payment plan knocks a 30yr down to 22yrs. Two payments a year should get it below 20 yrs. There are web sites with amortization schedules on them. You could type in all types of scenarios to see what works best for you. You are on the right track though. If times get tight, you just make your regular payments. Don't redo your mortgage as it will cost you money what you can do for free.
- mrsdeliLv 61 decade ago
The only way to shorten the mortgage is to pay twice a month and add $100 to each payment. For example: if your mortgage is $2000 per month pay $1000 plus the extra $100 2 times per month. You can actually set this up with your mortgage company. It's call the Bi-weekly payment plan.
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- 1 decade ago
Making an extra payment every month will reduce your term by only a few years. You should look into a loan with a shorter term since you're going to be paying extra every month anyways.
Or better yet, theres a new program available that can pay off your loan in as little as 8 years without refinancing, its NOT a bi-weekly or debt roll-down program, theres little or no change to your current standard of living, and its guaranteed.
You have nothing to lose but years of mortgage payments!Source(s): Alex Myers Sr. Home Equity Advisor Alex@SynergyMortgage123.Com