If I make one extra payment a year on a 30 year mortgage note, about how many years can I knock off the note?

Right now my interest rate is 4.75 fixed. I've made two payments so far. I have 23 years till retirement, so I'm looking for the early payoff route. I've heard one extra payment a year knocks off seven years.

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  • 9 years ago
    Best Answer

    About 7 years is right.

    Find out exactly how much.

    Google: Mortgage extra payments calculator

    http://www.bankrate.com/calculators/mortgages/mort...

    ^ Bankrate.com has some pretty good calculators.

    You can make 2 extra payments a year if you want.

    Or you can make any amount towards principal you want at any time.

    Just make sure when you write your separate check, to put a note

    "payment towards principal only"

    Make sure the bank did not make any mistakes when you check your statement.

    ---

    Added note: Never make extra payments unless you have cleared off other high interest debt such as car loans, and credit card debt.

    And never get aggressive paying off debt, unless you have a full 6 months worth of emergency living expenses in a saivngs or a cd.

    You never know when you will have major medical expenses not covered by insurance, major car repairs, or lose a job.

    Once you are unemployed, it's very hard to be approved to take and equity loan out of your home.

  • Anonymous
    9 years ago

    I agree with Shopper, pay off those credit cards first and then worry about the mortgage. Additionally how are you so sure you will remain in that same house for the next 23 years? If you have extra money you would probably be better off upgrading some things in the house over the years, as needed, that would increase the value when you do sell which would offset the payments that you might be trying to pay up front.

  • 9 years ago

    Yes. Bi-weekly payments (13 payments a year) will pay off a 30 year loan in 22-24 years.

  • Janet
    Lv 4
    4 years ago

    Seven years from what the financial advisers have always told me... So, basically you would pay off a 30-year mortgage in 23-years.

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  • 9 years ago

    I'd like to point out that when paying the extra payments, make sure they are applied to the "back end" or they will just record it as being paid early. This doesn't save you anything on the interest.

  • ?
    Lv 7
    9 years ago

    1.5 yrs. That is the dumbest way to pay down a mortgage. You are better off sending a 100 extra each month and marking it as principle. The earlier you pay extra the less interest you pay

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