Back in February my wife and I purchased our first home.Â Our first payment was due April 1, and posted on April 10.Â Â Â As of today, we have made 6 regular, scheduled monthly payments.Â We have also made 4 additional payments – payments which are applied directly towards the mortgage principal.
We have a conventional 15-year mortgage and we want to pay it off as soon as is possible.Â Our mortgage lender has a great amortization calculator, which allows us to compute the impact of extra payments.Â It’s great for calculating the impact of regularly scheduled, equal payments, but I wanted a more flexible calculator, one which would allow me to calculate the impact of extra payments, regardless of schedule or amounts.
I searched around a bit and found this spreadsheet, over at The Mortgage Professor’s Website. It helps me to do just what I wanted.Â I downloaded the spreadsheet and used it to calculate various payoff scenarios.Â Click on the link and look for the spreadsheet labeled Extra Payments on Monthly Payment Fixed-Rate Mortgages. It’s very simple to use – and kinda fun to play with!
Had we chosen to simply make our regular monthly payments, without any additional payments, our original mortgage balance would have been reduced by 2.34%.Â However, we chose to make 4 extra payments, so our original mortgage balance has been reduced by… wait for it… wait for it… 2.86%.Â That’s right, my friend, an extra .53% – gone!
Okay, okay.Â .53% extra isn’t that big of a deal, but it is a start.Â Even at this modest rate, we’re already on our way to turning our 15-year mortgage into a 13-year mortgage!
Moving into a new house was exciting, and we spent the first few months sprucing things up.Â Now that we have things “like we want them” we will turn our attention towards paying off our mortgage.Â We will be sensible, but we will push ourselves.
4 thoughts on “Early Mortgage Payoff Update 1”
Congrats on such great steps to paying your mortgage off early. Does your mortgage have a clause that charges a penalty if you pay off too much extra per year?
No, there is no pre-payment penalty associated with my mortgage.
I want to congratulate on your extra principal payments. We’d been paying extra on our mortgage, since our first payment, but this past July, we bagan paying gazelle intense on the principal. Our mortgage balance in June was $238,766.15, the balance as of October 1 is $234,053.94. I’ve read many articles on the pros and cons of paying off the mortgage early, but my gut instinct is tells me to pay it off as soon as possible.
Can I use the Extra Payments on Monthly Payment Fixed-Rate Mortgages for other loans also such as student loans, car loans etc…
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