Can $100 extra dollars help with my mortgage
These days $100 doesn’t go very far, but perhaps putting an extra $100 towards your mortgage can add up pretty quick and before you know it, you will have quite the balance in your bank account.
Let’s have a look at few examples just by adding $100 dollars
You have a mortgage of $300,000 with a rate of 2.89% and a 25 year amortization. After 5 years you’ve paid an extra $6,444 leaving a balance of $249,435 the remaining amortization is 17 years and 9 months instead of 20 years. You have an interest of $11,423 in savings over the life span of your mortgage.
Now let’s say you put an extra $200 per month on your mortgage, after five years you will have paid off an extra $12,888. With a new balance of $242,991. Your amortization is 15 years and 11 months with an interest savings of $20,708 over the course of 5 years.
I am sure you’re thinking what about rates? Well let’s look at the same $300,000. Mortgage this time with a 4.00% interest rate.
After 5 years, you’ve now paid off $6,624 with a balance of $254,537 and the remaining amortization is 16 years and 11 months with a savings of $17,282 over the life of your mortgage. This will simply be accomplished by paying an extra $100 per month.
And if we increase the payment by $200 per month by the end of 5 years, you will have managed to pay off $13,256 with a balance now of $247,905. Amortization is 15 years and 7 months with a savings of $31,130 over the lifetime of your mortgage.
As interest rates rise, you can benefit even greater from your pre-payments. If you think a $100 doesn’t go a long way, remind yourself about this blog and go back to the examples listed up above. They may be small payments but in the long run can add up to large savings and will add up even quicker if interest rates go up.
For more knowledgeable information on this topic or help with all of your other mortgage needs reach out to one of our mortgage agents today at 416-241-2227 or send us an email at email@example.com .