Many homeowners do not realize by the time they pay off the mortgage, the amount paid in interest will be larger than the original loan amount. But, by making extra payments monthly, yearly or in one lump sum, a substantial amount of money can be saved.
Calculate your current loan
To figure how much you will save by making extra payments, calculate your current loan. Use Bankrate's mortgage calculator to enter your mortgage amount, interest rate, ZIP code and loan term. Enter the current and not the original balance on your mortgage. Then hit "calculate" to get the current loan amount. The payment may not be exact, but it should be a close estimate of what you're currently paying.
Add extra payments
To add extra payments, click on the amortization schedule. Then click on "Add extra payments to your schedule." You can add extra payments by month, year or in one sum. Once you update the amortization table, you'll see how extra payments will affect your interest over the long term.
Search for better rates
If you financed a home before mortgage rates started dropping to record lows, you might want to consider a refinance. The mortgage calculator can help you find lower rates from banks throughout the country. Look for lower rates and use the calculator to figure out how much less your monthly payments would be if you refinanced. Just remember there are plenty of costs associated with refinancing, so it's important to add those into your calculations.
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