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Paying extra on mortgage

February 20th, 2006 at 05:16 am

Okay, I just set up my amortization schedule for my house. I am currently paying about $15 extra. Paying $15 extra pays my house off 18 months early.

Doing the chart really shows me how much difference the extra really makes. It motivates me to send extra whenever I get the chance (after I pay off the other debt, right now anything extra we get is going to cc debt).

4 Responses to “Paying extra on mortgage”

  1. PamelaB Says:

    In my finance class our professor was all about using the amortization schedule to pay off a house or auto early. I jumped on the wagon with my car from the beginning and will be paying it off early too.. 3 years early and saving $3,900 in interest! I'll be so happy!! Only two payments to go!

  2. PrincessPerky Says:

    congrats to being able to do that! I like the chart idea, I should look into doing that, how did you?

  3. contrary1 Says:

    Seeing something in black & white is such a tool for me too.
    And, $15.00................that's fairly easy to scrape up!!!


  4. cercis Says:

    I use a spreadsheet. The rest is interest calculations.

    I set up columns - payment month, current principal balance, interest payment, payment amount, new balance.

    So, you take your interest rate (8%, say) and divide it by 12 to get the monthly rate (this only works for mortgage payments, other payments will need to be divided by either 365 or 360 to get your daily rate). Don't forget to convert the percentage to decimals - 8% = 0.08.

    Multiple your current principal balance by the monthly interest rate. This tells you how much interest you are paying this month. Type in the payment amount you want to pay. Add the cell with principal balance to the cell with interest and subtract your payment - this is your new balance.

    Move that balance to the next line, and do the same calculations. (I copy and paste once I have it set up).

    So, my cells look like this (the formulas, not what actually shows)

    A------------- B --------C -------------D ------------E
    feb 06 ---80,0000-- =B*0/0067 ----800 ---- =B+C-D

    What you can do is have B set up to equal cell E in the prior row (so B2=E1, in excel you do that by typing =E1 when you copy and paste, it should change the number to keep the same idea.

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