Does an amortization table auto adjust over time to reflect extra payments to the principle?

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I have a 30 year loan at 7% on $ 60,000. The mortgage payment is only
$ 537 with ($ 150)escrow. I pay it each month AND an additional $ 300
towards the principle. Roughly, this will reduce my total term to
have this thing paid for and done in about 11 years based on my
calculations.

My question is this. I have studied and can easily produce an 30 year
amortization schedule telling me that in 11 years, in 2021 I will
still be paying $ 290 worth of interest PER MONTH. This is based on 30
years, 7% and 60,000.

I am considering refinancing and am aware that 7% is too high,
although it is an investment property.

My question:

Does an amortization table auto adjust over time to reflect extra
payments to the principle? At the rate I’m going, will I still be
paying $ 290 on interest in year #11 of the payment, even though my
balance will be very low in 11 years, (with the extra payments I make)

OR is the only way to reduce the amortization or redo it, is to
refinance and shrink the term to a 10 or 15 year loan?

2 Comments
  1. Reply
    mzmogul
    April 30, 2011 at 1:25 am

    Your question is a little confusing. If you are paying 300 extra per month every month you are paying approximately 6 extra payments a year. To see the effect that these six payments would have on the schedule of principal and interest paid you would need to do a new ammoritization schedule after each payment. This seems time consuming but their are programs online that can do this for you. I can tell you though that 1 extra principal payment a year will reduce a 30 year mortge to 23 years to pay off. Each additional payment increases the amount of years cut off of the end of the mortgage exponentially.

  2. Reply
    Jin H
    April 30, 2011 at 2:12 am

    First of all, you should absolutely refinance. Your 7% interest rate is way too high even for an investment property. Of course I don’t know the loan to value, your income, credit scores etc which affect your rate but assuming that it’s all average or above average, it should be in the 5’s or 6% range at the most.

    As for your confusing scenario about the amortization table 🙂
    check out http://www.bankrate.com. Their mortgage calculator will show you every possible breakdown for milliion scenarios that you want to know about. I use that site to answer my client’s similar questions that you’re currently asking.

    good luck!

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