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What's coming up next year for mortgage rates... the Fed... housing markets... home prices? See HSH's 2022 Outlook for our expectations!

What's coming up next year for mortgage rates... the Fed... housing markets... home prices? See HSH's 2022 Outlook for our expectations!

How much will I save by prepaying my mortgage?

Q: I have 13 years left on a 15 year loan at 4.375% with a balance of $78,100. How much time would I knock off of the mortage if I pay an additonal half of the payment on the 15th of each month and is the better than just paying one extra payment a year via extra principal each month?

A: With a fairly small loan amount and a short loan term you already have paid for several years, it will be hard to obtain substantial savings or term shortening by switching to a bi-weekly payment. You can do complex prepayments using our Homebuyer's Calculator Suite; we reverse-engineered your numbers to determine that you started two years ago with about an $87,000 loan, and starting to make one extra payment per year with next month's payment, you'll shorten the total loan term by about 16 months, saving about $2,810 in interest charges.

Ask the expert
Keith Gumbinger
Keith Gumbinger
Mortgage Expert
Vice President, HSH.com
About Keith: Mortgage market observer and analyst with 35 years experience... (more)
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