There’s a fantastic article on CanadianMortgageTrends today (read: A Little Extra) that touches on how much could be saved if as little as $20 was added to a monthly mortgage payment. For fun, here are a couple of examples to show how far a little extra money could go (for all examples, assume a mortgage size of $200,000, a rate of 2.99% and a 25-year amortization).
[box style=”rounded” border=”full”]Example #1:
Prepayment Amount: $25/month
Interest Savings: $3,464.11
Amortization Savings: 11 months
Example #2:
Prepayment Amount: $50/month
Interest Savings: $6,644.71
Amortization Savings: 21 months
Example #3:
Prepayment Amount: $100/month
Interest Savings: $12,289.53
Amortization Savings: 40 months[/box]
So even with an extra payment of $25/month over 25 years, you’d save almost $3,500 in interest, and shave almost a full year off your mortgage. If you could squeeze out $100 extra per month on your mortgage, you’d take off almost 3.5 years from your mortgage, and save over $12,000 in interest!!
If you think you can spare a little extra each month, the savings can really start to add up quickly. If you’d like to discuss how you can start chipping away at your mortgage, contact your favourite mortgage broker, and we’d be more than happy to help you put together a plan (for FREE!) to pay off your mortgage faster (and save you a bunch of money!).
