If I have a mortgage loan of $29,900 with an interest rate of 8.0% and the term is 60 months…..?

Deal Score0

How much Interest can I save and how much sooner will i pay it off, If I make an extra $ 1000.00 principal payment a year? Can someone please break that down for me….

2 Comments
  1. Reply
    Sally
    May 13, 2011 at 11:42 pm

    Go to http://www.bankrate.com and the calculator option and you can do all kinds of scenarios on the figures.

  2. Reply
    jay w
    May 14, 2011 at 12:18 am

    Ok, lets try to answer this one for ya,

    $ 29,900 loan at 8% Interest for 60 months (are you sure 60 months, that’s only 5 years?, anyway)

    Your payment would be (P&I only): $ 606.26
    If you paid for the full 60 months, your total payments, including interest would be:$ 36,375.32 which is $ 6475.92 of interest.

    Assuming you started the loan on Jan 1st and on Dec 1st of every year, you made a payment of $ 1,606.26, your total Interest would drop to $ 5,685.95. You would also pay the loan off 7 months earlier!

    Thus, making an extra payment of $ 1,000 a year for 4 years (last payment would be #53 instead of 60) would save you $ 789.97 over the life of the loan.

    Not a bad deal if you can swing it.

    Good luck,

    Jay
    LO in Michigan

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