For those of you that could afford a higher monthly mortgage payment I recommend you consider reducing the term on your loan.
For instance, going from a 30 year loan to a 10 year loan will save you a BUNCH of money.
…money you could have accumulated in a retirement account, or sending your children to a good school, etc.
Take a look at the chart below. You can see the interest savings is significant.
The payment on a 10 year loan is roughly twice as high as a 30 year payment. …but if you can at all afford the payment it’s a very smart thing to do.
…just think of having your house completely paid off in 10 years!
| Loan Amount | $100,000 | $200,000 | $300,000 | $400,000 |
| Interest Rate | 3% | 3% | 3% | 3% |
| Term | 10 Years | 10 Years | 10 Years | 10 Years |
| Principle & Interest Payment | $965 | $1,931 | $2,896 | $3,862 |
| Interest Paid Over Life Of Loan | $15,872 | $31,745 | $47,618 | $63,491 |
| Interest Savings On 10 Year Over A 30 Year Loan At 4.5%. | $55,996 | $111,994 | $167,989 | $223,987 |
| (Assume 80% loan to value ratio) |
If you would like to see what your payment would be on a 10 year loan – give us a call or shoot us an email. We’ll be happy to help you out with it.
That’s it for today!
Have a good day today! …and thanks for reading.
Brett
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