Quote:
Originally Posted by Shazam
I have 10 1/3 years left, but I have been contributing all of $160 extra a month, which brings the amortization down to 7 1/4 years. It is absolutely worth doing, esp. since you really don't have to actually add much more.
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Agreed. I don't know if other platforms all have it, but most mortgage platforms I've ever used showed me what the estimated amortization would be if I adjusted my payments lately, I could do it a few times a year plus lump sum payments up to a percentage limit once per year. People need to play with this calculator more and understand what it means.
IIRC, even $50 extra per payment could melt off something like 2-4 months on a $500K+ mortgage. But it's not incremental, it's exponential due to compound interest. $500 a month is more than the 10x melt off per year, so it might melt off more than 20-40 months if you could commit to something like that.
$6K a year is $60K extra in pure principal payment after a decade in extra payments and $120K after two decades. That simple calc and ignores the compound interest savings on the mortgage interest rate saved over decades which actually means significantly more principal pay down.
Many people look at $1,500-6,000 a year ($125-500 a month) as something inconsequential and might make inefficient and ineffective financial decisions of that and more up to several times per year. But if you're sitting on a mortgage, that much extra in attacking your mortgage of hundreds of thousands of dollars actually makes a surprisingly bigger dent than you'd assume it would. Longer term, "only" saving that small single digit mortgage rate goes further than many realize.
Especially when most people don't perceive the scale of the duration of a 25-30 year mortgage. That's enough time for a child to be born AND graduate post secondary with time to spare. That might be longer than how long some parents spend taking care of the vast majority of the everyday facets of their kids lives.