From the video
The extra payment that ends 30 years first
You came from the video about which extra payment actually shortens a mortgage. Here is the one-page worksheet that runs all four routes on your loan: a flat extra amount, biweekly, a lump sum, or nothing at all. It ranks them and tells you which one ends it first. Free.
Get the free Retirement Money Blueprint, plus the Extra Payment Worksheet
Three cells: what you still owe, your rate, and the months you have left. Two more for what you could add. Out comes every route ranked by which one ends the loan soonest, with the interest each one saves you. The video's loan is on the sheet too, so you can see the arithmetic is the same. The Retirement Money Blueprint and its workbook come with it.
The Extra Payment Worksheet (Excel)
The same thing as a PDF, to print
The three numbers from the video
All of these come from the same loan: $380,000 at 6.5% over 30 years, a principal and interest payment of $2,401.86.
| What you do | Paid off | Interest saved |
|---|---|---|
| Nothing extra | 30 years | — |
| Add $100 a month from month one | 3 yr 3 mo early | $63,434 |
| Switch to biweekly payments | 5 yr 10 mo early | $110,526 |
| Add $343.53 from month one | 8 yr 7 mo early | $160,659 |
| Add $343.53 starting in year ten | 4 yr 5 mo early | $63,400 |
Biweekly here means half your payment every two weeks, which works out to one extra full payment a year.
That last pair is the whole point. Same payment, same loan. Waiting ten years to start costs you $97,259.
Why waiting costs that much
In month one, $2,058.33 of your payment is interest and only $343.53 touches the balance. Your payment does not split evenly until month 233, nineteen and a half years in.
It takes 21 years and 5 months to pay off the first half of the loan, and only 8 years and 7 months to pay off the second half. In the last ten years each check buys about two and a half times as much house as it did in the first twenty.
An extra dollar early removes interest for the entire remaining life of the loan. The same dollar in year ten has far less time left to work.
Run it on your own loan
Mortgage Payoff Calculator Extra Payment Calculator All 8 calculators
Who should not do this
Paying a mortgage down early is not automatically the right move. If you carry credit card debt at 20%+, that is costing you more than the mortgage is. If you have no emergency fund, build that first, money paid into a mortgage is very hard to get back out. If your employer matches retirement contributions and you are not capturing the full match, take the match first.
The workbook above sorts that order out for you before you put a dollar anywhere.
The four questions this worksheet does not answer
Can you recast your loan, or is it FHA and cannot be recast at all? When can your PMI come off, and against which value? What will escrow do next year? Should retirement money go near the house at all? The Payoff Planner Pro answers all four on your own numbers.
See the Payoff Planner Pro →One payment of $97. Nothing renews. 30 days to change your mind.