15 YR Mortgage - extra payment?

[mrsboz]

Someone told me that if you make an extra payment every year on a 30 year mortgage that it would cut your time in half. Does that mean if we make two extra payments a year it would cut our 15 year mortgage in half?

 

[lisabarr]

One extra pymt on a 30 will cut off around 7 yrs on your loan. I don't know how that works on a 15.

 

[rob6597]

I think I did the math right here...

If you make one extra payment (of principal and interest) per year from the beginning (averaged across all months... so the extra payment is divided by 12 and that amount is added to each month's payment), you'll pay off a 30 year mortgage in about 23 years 9 months.

2 extra payments: 20 years
3 extra payments: 17 years, 4 months
4 extra payments: 15 years, 4 months
5 extra payments: 13 years, 10 months
6 extra payments: 12 years, 7 months
12 extra payments (double your P&I each month): You'll pay off your 30 year mortgage in 8 years, 4 months.

Here are the numbers if you've got a 15 year mortgage:
1 extra payment per year: 13 yr 1 mo
2 extra payments: 11 yr 8 mo
3 extra payments: 10 yr 6 mo
4 extra payments: 9 yr 7 mo
5 extra payments: 8 yr 9 mo
6 extra payments: 8 yr 1 mo
12 extra payments: 5 yr 8 mo


Rob

 

[MALE*RN*777]

Couldn't really tell you the exact time but the morgage company could. We make the same monthly payments but send money in the middle and the remainer at the end which will cut off about 7 years.

 

[Jules123]

There is a great loan calculator on bankrate.com that tells you how much extra payments cut off your loan.

 

[comicguy]

Last year when we signed the new mortgage paperwork the banker told us that 1 extra payment a year will make my 30 mort, a 22 year mort.

 

[Deesknee]

Remember when you make the extra payment to tell the bank you want it to go to principal only.

Dh used to have our mortgage paid bi-weekly. This would've brought a 20yr mortgage down to 15.5 years!

 

[ohiominnie]

heard once that if you pay an extra $100 to principle early in the loan (for the first year I think it was) that it'd cut your mortgage time in 1/2. can't remember where I heard that though.

 

[PartyOf5]

When we took out our 30 yr biweekly out, we were told we would pay it off 7years and a few months early.

We have consistently put extra down on the principal each biweekly payment so we are hoping to pay off the mortgage in a total of 15 years (maybe less!). Once I get my bad debt paid off, I plan on putting that extra money towards the mortgage to escalate further.

 

[djm99]

Right after 9-11 my DH and I refinanced with an 18 1/2 loan, basically, we made a payment EVERY two weeks. For example my house under our original loan was roughly $1000 (inclusive of taxes & insurance). When we refinanced, we paid $576 every two weeks. We were paying about 2 ½ extra payments a year. This was supposed to be paid off in 18 1/2 years. It was cool until our loan was sold to a not good company, we recently refinanced again, never taking equity out, but lowering our interest rate.

 

[clh2]

heard once that if you pay an extra $100 to principle early in the loan (for the first year I think it was) that it'd cut your mortgage time in 1/2. can't remember where I heard that though.

It will cut down on the length of the mortgage, but remember, it really depends on the amount of the mortgage too.

 

[sasmmb]

If thinking of doing a bi-weekly or semi-monthly loan, read the fine print as most lenders charge extra for this "priviledge". As I understand it, just making your own extra payment once per year has the same effect but without the fees.