How Can I Pay Off My Mortgage Faster? Basic Concepts
To understand this, let's look at how your is determined. We'll use a $200,000 mortgage at 6.0% for our example.
- The monthly payment would be $1199.10.
- The is $200,000 * .06 = $12,000/ 12 months = $1000
- The principal payment would be $199. That's right. After one month you will have paid $1199.10 and your balance will have gone down $199.
- A lower principal balance = a lower amount of interest. Each month the amount of interest paid goes down and the amount of principal paid goes up.
- Anything extra