Mortgage Amortization calculator
Your mortgage is probably the largest single loan you will ever take unless you are an entrepreneur or business owner. Most Americans take a mortgage over 360 months or 30 years so unless you took out your mortgage before you were 20, you are going to need to start making extra payments if you want to pay it off before your reach 50.
You will see how relatively small amounts extra can make an enormous difference to both the time it will take to repay the mortgage and the amount of interest you will save, even in these low interest environments.
Reducing the mortgage term
Here is a great example: Change the term from 360 months to 240 months, that is 1/3 reduction in the term.
In the pre populated data, the payment increases from $1713 to $2075 that is just a little over a 20% increase in your monthly payment to reduce the term by 1/3 or 10 years.
Play around with this calculator and see how little effort it takes to become financially secure in retirement.
Need a few tips on how to save a few Dollars to help make this possible? Take a look at the retirement calculator and read the section on freeing up some extra cash for savings.
You can also use this mortgage calculator as a mortgage affordability calculator. See what payments you will need to make in order to afford a mortgage.
Once you have done that, reduce the term to 240 months and see if that amount is comfortable for you. If the answer is yes, then you are off to a good start. Don’t over extend yourself, make it a comfortable exercise and grow the equity until you can afford a bigger, better home.
“There seems to be some perverse human characteristic that likes to make easy things difficult.”
– Warren Buffet
We should all be reducing our debt and starting to live life without stress and worry.
Knowledge is power and knowing the age you will be able to retire is very comforting. You can make small adjustments to bring the age down and give you more choice. If you have enough money to retire at age 50, the choice is then yours!