Even though you and your mortgage lender have agreed on a monthly payment plan, that doesn't mean that amount is set in stone. It's just the least you can pay. Using a mortgage calculator, especially a pre-payment loan calculator, you can see where making extra payments can save you money on your mortgage in the long run.
The mortgage calculator will show you right away that you don't have to pay a lot more money to make a difference. Even regular small payments can make a big difference in how long it takes you to pay off your mortgage. Even the amount of interest you would have to pay will go down. Imagine that the mortgage you thought you'd have until you were 50 can be paid off easily by the time you are in your mid-40s! That's a good reason to use the right mortgage calculators to figure out what kind of extra payments you need to make to reach your goal.
First, you need to use a home budget calculator to figure out how much money you have. How much money do you have each month that you can spend? Where does this thing go now? Could you comfortably put an extra $50 a month toward your mortgage, for example? Put that number into the mortgage calculator to see how it would change the long-term picture of your mortgage.
It can become a habit to try to save more of your disposable income and put the extra money into a mortgage calculator, but you should be careful not to overextend your finances. Even though the pre-payment mortgage calculator makes it easy to see how much faster you could pay off your mortgage, it's easy to get carried away and forget that you need to keep your finances in order for other things.
One of the best things you can do is find a small extra payment you can make each month without too much trouble. For example, you could cancel subscriptions you don't use or stop going to a popular coffee shop once a week. Use the mortgage calculator to figure out how this affects the principal of your loan. This will have the least effect on your mortgage.
Next, try to put some extra money away in a separate bank account and not touch it. If you haven't needed the money for an emergency in the past year, you can take it out after 12 months and make a single larger payment against the capital (while still making the basic monthly payment in the same month!). and then use your mortgage calculator to figure out how much this has changed things. So, you can keep the money and still pay down your mortgage. But it won't cut your interest as much as a monthly payment would. Check out all of these things on the mortgage calculator.
A mortgage is a long-term commitment, but with the help of a mortgage calculator, you can see how you can shorten the time by making more small payments each month. Isn't it worth looking into if you can pay off your mortgage faster and pay less interest without hurting your finances?
