Extra Payment Calculator
See how putting more towards principal can pay off your home faster!
Laura Jewett
Platinum Living Realty
Estimate based on local averages and assumptions they may not apply to you and are provided for information purpose only.
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Estimate based on local averages and assumptions they may not apply to you and are provided for information purpose only.
3 reasons to pay extra towards principal
Paying extra towards principal on your home is a great way to save money and build equity in your home but many time owners don't do it because they don't know what it can mean for them. Below are 3 important reasons why paying extra towards principal could be a good idea for you.
1. Pay less in interest
You pay the interest on the balance Of your loan every month. By paying extra towards principal each month you lower your principal amount, therefore lowering the interest payment more and more each month. Over the course Of your loan you will pay signifigantly less interest on your loan.
2. Pay your mortgage off sooner
Most mortgages are 30 years in length and paying extra towards principal each month cuts into that. The more principal you pay, the shorter your mortgage gets. so, just because you have a 30 year term on your loan doesn't mean you have to pay for 30 years. The real term of the loan is up to you.
3. Pay less in mortgage insurance
Mortgage insurance is extra money you are paying every month if you put less than 20% down on your loan. You can get rid of mortgage insurance once you get to 80% equity in your house and by paying extra towards principal you can acheive that goal sooner.
Want to know how you can save by making extra payment?
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