Mortgage Magic: How to Pay off Your Home Quicker

You can pay off your mortgage sooner with an extra payment. But how much?

Desk calculatorThis handy tool can be used to find out how long it will take to pay off a mortgage with an extra payment or a lump sum payment.

We all love amortization calculators, which allow us to quickly determine the remaining number of months on our loans. The article will review an amortization calculator that makes the calculation and displays the results much easier to understand than others. This calculator can help you determine how quickly you can pay off your mortgage, and even how to calculate the principal and interest paid each month as an additional payment.

The Amortization Calculator shows the difference between the original mortgage amount and current value with an extra monthly payment. It's a simple but effective tool for calculating the amount of time it would take to pay off a mortgage or other loan.

What Is Loan Amortization?

Loan amortization is the process of breaking down the loan into its individual components and calculating how much you owe at any given time. You can calculate the total amount of money you'll owe at the end of the loan using the following equation:

Interest x Term = Principal (Term)

In this example, Principal (Term) is the amount of money you owe divided by 12 (the term in years), multiplied by the amount of interest you pay per year. For example, if you take out a $1,000 loan for 24 months at 3 percent interest, the amount you owe after the loan is paid off would be $1,048.:

$1,000 / 12 * 3% = $75.83 principal (24 months)

$75.83 principal (24 months) + $0.0183 interest (per month) = $76.85 total interest

Principal (Term) is the portion of the loan that's paid off each month. This number changes as your loan progresses. After you have paid off your loan, the Principal (Term) is equal to the amount of money you originally borrowed less the amount you still owe. After you have paid off your loan, the Principal (Term) is equal to the amount you initially owed less the amount you still owe.

In this case, Principal (Term) is $1,000.

How Do I Calculate the Amortization Schedule?

Loan amortization graphicThe calculator works by entering the loan amount, the interest rate, the years of the loan, the monthly payment, the extra payment and the start date.

Calculate Interest Payments

Calculating the total amount of interest is easy with the amortization calculator. Simply enter the details of your loan into the calculator, and you'll see the result in seconds. If you've made extra payments, you can also enter your extra payments, and it will show you how much you'll need to make each month to reach the end of the loan term.

Calculate Loan Payment

Our amortization calculator allows you to enter a value for the loan amount, the interest rate and the number of payments per year. It then determines the payment and total payment of the loan or mortgage and the amount paid toward principal. The calculator can be used for any kind of loan, such as a mortgage, personal loan or car loan.

Calculate Extra Payment

This tool allows me to calculate how much interest I pay monthly on the loan. It tells me how long I'll need to pay the loan off if I only make the minimum payment every month, and how much I could pay off early if I make the minimum payment plus an extra $100 every month. The amortization calculator also lets me see how much the loan will cost me at any point in time. It breaks down the numbers into a chart that shows how much the loan is costing me monthly and how much I'd pay off after making a single, lump sum payment.

Rotating question markFrequently Asked Questions (FAQs)

Q. Do extra payments automatically go to principal?
A. Extra payments are usually applied to principal. (check with your lender to ensure that the extra payment is processed correctly).

Q. Regardless of when you pay your mortgage, does it really matter?
A. You should pay your mortgage on the 1st day of the month for no other reason than there could be a delay with the U.S. Postal Service.  

Q. Does paying an extra $100 a month on mortgage help?
A. Making an additional payment reduces the total interest paid to the lender.

Q. How do I make sure my extra payment goes to principal?
A. Call the lender.

Q. Is it true that reducing down principle reduces the amount of interest payable?
A. Increasing your mortgage payment does not result in a decrease in your monthly payment. The additional principle payment will lower your interest costs during the loan's term.

Conclusion

In conclusion, using a loan calculator can help you pay off your home mortgage sooner. By inputting information about your loan, such as the principal, interest rate, and length of the loan, you can see how much you could save by making extra payments. You can also use a loan calculator to see how a refinance could benefit you. So, if you're looking for ways to pay off your home mortgage sooner, be sure to check out a loan calculator.