Our rate table lists the best current local mortgage rates available from our lender network

Our rate table lists the best current local mortgage rates available from our lender network

This free online calculator will show you how much you will save if you make 1/2 of your mortgage payment every two weeks instead of making a full mortgage payment once a month. In effect, you will be making one extra mortgage payment per year — without hardly noticing the additional cash outflow. But, as you’re about to discover, you will certainly notice the “increased” cash flow that will occur when you pay your mortgage off way ahead of schedule! But wait, this calculator will even show you what will happen if you go one step further by adding an additional amount of money to the monthly amount you’re currently paying.

This calculator allows you to figure the savings by adding an extra amount to your fixed monthly payments the potential savings by making biweekly payments. Enter your loan details, the extra monthly payment amount you would like to make click calculate.

Today’s Best Mortgage Rates

Set your search criteria by entering your loan data and selecting the relevant products from the dropdown, click search and we’ll help you compare the market by showing you the most relevant offers for homeowners.

Retiring a Mortgage with Extra Payments

Many homeowners invest in home security systems to protect their property and personal assets. However, a security system will not protect the homeowner against financial disaster or bankruptcy. Making additional mortgage payments will shrink the total amount of interest paid over the life of the loan, and the borrower will pay off the debt more quickly. In addition, the home equity will grow at a faster pace when extra payments are applied to the loan. This provides for a margin of protection by lowering the interest costs. This method gives the property owner a home free and clear of debt. More payments on the principal of the loan equate to assets earning interest at the same rate as the interest rate on the loan.

15 Year vs 30 Year Loans

If a borrower makes an extra annual payment, the savings on interest can be quite substantial. On a 30-year mortgage with the original principal total of $250,000 and an interest rate of 6.5 percent, the monthly payment is $1,580, including both principal and interest. By making the scheduled payments over the life of the loan, the total amount paid in interest will be $319,000. However, if the homeowner pays one additional monthly payment per year, the total interest paid declines to $249,000, a difference of $70,000. This payment strategy shortens the loan from 30 years to just over 24 years.

An alternative to making one extra monthly payment per year is to make a higher monthly payment. For example, on a 15-year loan of $300,000 at 5 percent interest, adding $200 to each monthly payment reduces the interest costs substantially. If the monthly payment is $2,372, making a payment of $2,572 saves $15,376 in interest over the life of the loan. The loan is paid in full in 13.4 years instead of 15 years.

Mortgage Cycling

Borrowers have a variety of options for paying off home loans prior to the maturity date. One popular method is called mortgage cycling. Although the concept may be new to some homeowners, the strategy has a proven record of accomplishment when followed correctly. The basic strategy is easy to understand. However, some methods of mortgage cycling may involve higher risk to reward ratios. These techniques include taking out short term home equity loans to make payments towards the principal of the original mortgage. Without an accurate analysis of the borrower’s financial situation, it is possible that the riskier techniques can lead to higher interest costs and the prospect of foreclosure.