Lets say you go buy a house for $200,000 and put $40,000 down and then take out a 30 year $160,000 mortgage at 4%. You decide you'd like to pay off the mortgage faster and you put an extra $100 into your monthly payment. How long will it take you to pay off your mortgage?
You can find the answer by using an online calculator like the
Early Mortgage Payoff Calculator at TimeValue software
I used the calculator myself to generate some example numbers below.
For a $100,000 loan the number of years it will take to pay off an original 30 year mortgage based on making extra monthly payments of $100 to $600 :
| 4% | 5% | |
| $100 | 21.6 | 21.3 |
| $200 | 17 | 16.75 |
| $300 | 14.1 | 13.8 |
| $400 | 12 | 11.8 |
| $500 | 10.5 | 10.3 |
| $600 | 9.3 | 9.2 |
Roughly speaking if you pay an extra 50% on your mortgage monthly then it will cut your loan to about 15 years.
Doubling your payment will cut it down to about 10 years.
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