Pay Your Mortgage Off Early
See what 1 extra payment a year, or paying every 2 weeks, takes off your mortgage. Nothing is sent anywhere; the math runs in your browser.
Example numbers shown; type yours.
Your Result
You'd save about
$ 51,234
in interest.
Paid off 4 years 9 months sooner: 22 years 3 months in place of 27 years.
Your monthly payment is about $ 1,442. Every 2 weeks you'd pay $ 721.
Paying every 2 weeks adds up to 13 monthly payments a year. Some lenders hold a partial payment until the full amount arrives, which saves you nothing. Before you start, ask your lender how to make extra money go to principal, and whether there is a fee.
How I Calculated This
Your monthly payment on $ 220,000 at 6.5% over 27 years is about $ 1,442, from the standard loan formula.
Each month the interest is the balance times 6.5% divided by 12. The rest of the payment lowers the balance.
Half a payment every 2 weeks is 26 half payments, which is 13 monthly payments a year. I model it as 1/12 of a payment, $ 120, added to every month.
At $ 1,442 a month the loan clears in 27 years with $ 247,280 in interest. At $ 1,562 a month it clears in 22 years 3 months with $ 196,046 in interest. The difference is $ 51,234.
This assumes a fixed interest rate, no fees, and every extra dollar applied to principal the month you pay it.
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Questions People Ask
How Do I Make Extra Money Go To Principal?
Ask your lender for its own every-2-weeks program, or for its principal-only payment option. Then check your next statement to confirm the principal dropped by the extra amount.
Is Paying Every 2 Weeks Worth It?
It works because 26 half payments add up to 1 extra monthly payment a year. On $ 220,000 at 6.5% with 27 years left, that is about $ 51,234 less interest and 4 years 9 months sooner.
If your lender holds half payments or charges a fee, you get the same result by adding 1/12 of a payment to each monthly payment yourself.
Should I Pay Extra On My Mortgage Or My Credit Card First?
Clean up first. Extra money saves the most on the debt with the highest interest rate. Check the interest rate on each statement, then send any extra money to the debt you chose to pay first. Not sure which? Compare both strategies in the debt snowball calculator.