Mortgage Amortization

mortgage amortization

How Mortgage Amortization Works

  • While your mortgage payment stays the same each month
  • The composition changes over time as the outstanding balance falls
  • Early on in the loan term most of the payment is interest
  • And late in the term it’s mostly principal that you’re paying back

Ever wonder how your home loan goes from a pain in your neck to real estate free and clear?

Well, it all has to do with a magical little thing called “mortgage amortization,” which is defined as the reduction of debt by regular payments of interest and principal sufficient to pay off a loan by maturity.

In simple terms, it’s the way your mortgage payments are distributed on a monthly basis, dictating how much interest and principal will be paid off each month for the duration of the loan term.

Jump to amortization topics:

Principal vs. Interest
Mortgage Amortization Example
How to Shorten the Amortization Period
How to Pay Off My Mortgage in 10 Years or Less

Today's Rates

Understanding the way your mortgage amortizes is a great way to understand how different loan programs work. And an amortization calculator will show you how your balance is paid off on a monthly or yearly basis. It will also show you how much interest you’ll pay over the life of your loan, assuming you hold it to maturity.

Trust me, you’ll be surprised at how much of your payment goes toward interest as opposed to the principal balance. Of course, there’s not much you can do about it if you don’t buy your home in cash, or choose a shorter loan term, such as the 15-year fixed mortgage.

Unfortunately, with home prices so high and home affordability so low, most home buyers (and especially first-time home buyers) tend to go with 30-year mortgages. These are the default choice, whether we’re talking about conventional loans or FHA loans.

There’s nothing inherently wrong with that, but it does mean you’ll pay a lot of interest for a very long time. Still, if you can get a better return for your money elsewhere, or if you have higher-APR debt like credit cards, auto loans, student loans, and so forth, it can still be a great choice.

Early Payments Go Toward Interest

loan amortization schedule

  • This is a real amortization schedule for a 30-year fixed-rate home loan
  • You’ll notice that the bulk of the monthly payment is interest
  • Over time the interest portion will go down and the principal portion will rise
  • Thanks to a smaller outstanding loan balance

Pictured above is an actual “amortization schedule” from an active mortgage about five months into a 30-year fixed-rate mortgage. That means it’s got another 355 months to go. Almost there!

Your mortgage lender or loan servicer may provide an amortization schedule calculator that you can use to see how your loan will be paid off, or you can use any number of free loan amortization calculators found online. It can be helpful to make decisions about your mortgage going forward.

As you can see in the table above, the principal and interest payment is $1611.64 per month. It doesn’t change because the loan is fixed, but the ratio of interest to principal does.

Early on, more than $1,000 of that $1,611.64 is going toward interest each month, with just over $500 going toward the principal balance. You want those principal payments to go up because they actually pay down your loan balance. The rest just makes your lender (and loan servicer) rich.

The good news is as you pay down your mortgage, the total amount of interest due will decrease with each payment because it’s computed based on the remaining balance, which goes down as principal is paid back.

And as that happens, the amount of principal rises because a fixed mortgage has a fixed payment too. So it’s a win win. Sadly, it doesn’t happen all that quickly.

During the first half of a 30-year fixed-rate loan, most of the monthly payment goes to paying down interest, with very little principal actually paid off. Toward the last 15 years of the loan, you will begin to pay off a greater amount of principal, until the monthly payment is largely principal and very little interest.

This is important to note because homeowners who continuously refinance their mortgages will find themselves back in the interest-paying portion of the loan every time they start anew, meaning they’ll pay a lot more interest over the years.

Each time you refinance, assuming you refinance into the same type of loan, you’re essentially extending the loan amortization period of the mortgage. And the longer the term, the more you’ll pay in interest. If you don’t believe me, grab a mortgage amortization calculator and you’ll see.

Tip: If you have already paid down your mortgage for several years, but want to refinance to take advantage of low mortgage rates, consider refinancing to a shorter-term mortgage, such as a 15-year or 10-year fixed mortgage. This is one simple way to avoid “resetting the clock” and stay on track if your goal is to pay off your mortgage.

Use a refinance calculator to determine the best approach when doing your loan comparison analysis.

Let’s look at a mortgage amortization example:

Loan amount: $100,000
Interest rate: 6.5%
Monthly mortgage payment: $632.07

Say you’ve got a $100,000 loan amount set at 6.5% on a 30-year fixed mortgage. The total principal and interest payment is $632.07 per month. As noted, this amount will not change from the start date of your mortgage to the very end.


If you break down the very first monthly mortgage payment, $541.67 goes toward interest and $90.40 goes toward principal. The outstanding balance is reduced by $90.40, so next month you’ll only owe interest on a balance of $99,909.60.

When it comes time to make your second monthly mortgage payment, interest is calculated on the new, lower balance. The payment would remain the same, but $541.18 would go toward interest and $90.89 would go to principal. This interest reduction would continue until your monthly payments were going primarily to principal.

In fact, the 360th payment in our example contributes just $3.41 to interest and a whopping $628.66 to principal. A payoff calculator will illustrate this.

Consider Larger Mortgage Payments to Shorten Amortization Period

  • If you want to pay your loan off faster
  • And reduce your interest expense
  • You can make larger payments each month
  • And accomplish both those things

Okay, so now you have a better idea of how your mortgage amortizes or gets paid off. Your next move will be to determine if paying your mortgage down faster is a good idea.

In the example above, you’ll pay a total of $227,545.20 over the 30-year term, with $127,545.20 going toward interest. Ouch!

If you make slightly larger payments, say $700 each month instead (consistently), your mortgage term will be cut by roughly seven years (23 years total) and you’ll only pay $76,448.10 in interest. That will save you about $50,000 over the life of the loan…not bad.

If saving money is your goal, you can also make an extra payment here and there if you so choose, which can make a major dent in your loan balance. It’s actually pretty incredible how far a little extra goes in the mortgage world.

Conversely, you might be happy as a clam to pay your mortgage down slowly, seeing that mortgage rates are so low relative to other types of loans and/or investment options.

For example, if you can pay a rate of 4% on your home loan for 30 years and get a double-digit return in the stock market, what’s the rush? This is why some home buyers opt for adjustable-rate mortgages with no intention of ever paying off their loans, knowing they can do better elsewhere.

How Do I Pay Off My Mortgage in 10 Years?

  • If you want to pay off your home loan faster
  • Say in 10-15 years as opposed to 30
  • You simply need to figure out what the monthly payment would be
  • Based on the number of months in which you want it paid off

Now let’s look at some specific ways to greatly speed up the loan amortization process, assuming you don’t have other credit card debt, auto loans, personal loans, and the like. I’m providing ballpark estimates here, so do your diligence with a mortgage calculator to determine what works for your particular loan amount and mortgage rate. Results may vary.

How to pay off your 30-year mortgage in 20 years:

Depending on your mortgage rate, a monthly payment of around 1.2X to maybe 1.3X should whittle your loan term down from 360 months to around 240 months, and save a ton of interest in the process.

Just find out what the 20-year payment would be and you could make 240 monthly payments instead of 360. Then plug it into a mortgage payoff calculator to see the savings.

How to pay off a 30-year mortgage in 15 years:

If you want to cut your mortgage term in half, simply figure out what the 15-year payment would be, then make that payment each month until the mortgage is paid in full. In general, this is about 1.5X the 30-year payment.

For example, a $350,000 mortgage set at 5% would require a monthly payment of $1878.88 in order to be paid off in 30 years. If you made the 15-year payment of $2767.78 instead, the mortgage would be paid off in 180 months, or 15 years.

How to pay off a 30-year mortgage in 10 years:

If you want to pay off the mortgage in just 10 years, the rule of thumb is to double your monthly mortgage payment. It’s not exact, but it’s very close.

Using our example from above, you’d need a monthly payment of $3712.29 to extinguish the loan in 120 months. Those with relatively small loan amounts might have no trouble doing this.

At the same time, it might be a big ask for someone with a jumbo mortgage who is struggling with affordability as it is.

How to pay off a 30-year mortgage in 5 years:

If you’re really impatient and want to pay off the mortgage in five years, you basically have to make anywhere from 3.5-4X the monthly payment. That’s $6,604.93 in our example to pay it all off in 60 months.

How to pay off a 15-year mortgage in 10 years:

If you have a 15-year fixed, but want to pay it down in 10 years, you can generally make a monthly payment about 1.5X and it’ll be paid off in 120 months instead of 180.

How to pay off a 15-year mortgage in 7 years:

To cut your 15-year mortgage term in half (or a bit more), doubling mortgage payments would pretty much lower the term to seven years or less, perhaps closer to 6.5 years.

How to pay off a 15-year mortgage in 5 years:

For those with a 15-year mortgage who want to triple the payoff speed, a monthly payment roughly 2.5X will get the job done.

You can do this same formula for basically any mortgage term and desired payoff duration. So if you have a certain payoff date in mind, figure out the number of months first, then plug in that monthly payment into a loan calculator to get the length of the mortgage down.

I should mention that mortgage rates are lower on shorter-duration home loans, so you may actually save more money by choosing a shorter loan term to begin with. However, you do get the added bonus of flexibility if you have a longer-term mortgage and making extra principal payments is simply voluntary.

This is why a mortgage refinance from a 30-year mortgage to a 15-year fixed mortgage can be so powerful. Not only is the term shorter, but the interest rate is lower too. Sure, the payment amount will rise, but you’ll own your home a lot sooner and pay way less interest.

Take the time to learn about biweekly mortgage payments as well if you’re into saving money. These are payments made every two weeks, which equates to 26 total payments a year, or 13 monthly mortgage payments. That extra payment each year goes toward principal, lowering the total amount of interest paid and decreasing the term of the loan.

Every prospective homeowner should also take a look at an amortization schedule and/or a mortgage calculator to determine exactly how payments apply in their particular situation. Simply knowing your interest rate is not enough to make an educated decision on a loan product, let alone buying real estate.

You’ll see how much impact even an eighth of a percentage point can make, which illustrates the importance of having an excellent credit score so you can obtain the lowest interest rate possible.

Read more: 30-year vs. 15-year mortgages.


  1. Colin Robertson August 7, 2018 at 9:41 am -


    I outlined ways to pay off a mortgage in five years below. How/why you pay it off is preference and completely up to you, but the earlier you pay extra, the more you save because it means less interest is accrued. But as you mentioned, having a safety net is important too. So finding a balance you’re comfortable with might be key.

  2. john August 7, 2018 at 4:00 am -

    Hi Colin –

    I bought my house last year, 328K @ 3.375 7-1 ARM. I want to pay the house off before the ARM kicks in. my question is what the best approach ? how do I pay the home off in 5 years?

    so far I send the bank $3,500 a month which is roughly:
    $900 interest
    $540 principal
    $920 extra principal payment
    balance is taxes

    additionally I save $2,000 per month in a savings account to be used to pay off the mortgage. I thought it would be best to hold funds in savings account as a safety net not knowing what the future could bring me.

    starting January I will add another $500 to the savings per month and plan to add $10,000 to savings annually.

    so two questions, is this a smart approach to aggressively paying off my mortgage or should I send the bank more per month now ? and perhaps more importantly, when would this plan pay off my mortgage? I really would not want to refinance at year 7 and I wouldn’t want to see the rate adjust up either. I am divorced and restarting and looking at retirement once this house is paid off so a 5-7 year plan. thank you !!

  3. Colin Robertson February 13, 2018 at 3:12 pm -


    Your question isn’t totally clear to me, but any basic mortgage calculator will break down the total amount of principal and interest due in each monthly payment. From there, you can decide if you want to pay even more toward your principal balance each month.

  4. Sam February 13, 2018 at 10:47 am -

    How do you break monthly payment into a portion going toward interest and a portion going toward principal.

  5. Colin Robertson August 16, 2017 at 8:58 am -


    If you paid the entire principal balance the mortgage would be paid off in full. This is how mortgages wind up getting paid before maturity. If they made you pay all the interest somehow it would defeat the purpose of making early/extra payments. They might be referring to some nominal amount of leftover interest for the last month.

  6. Shawn August 15, 2017 at 8:22 pm -

    Hi Colin,

    I currently have a house loan of $300,000 on a 30-year fixed payment plan.

    Lets say I start making payments (large lump sums or small steady payments) specifically towards to principle (none to interest). If I get to the 10-year mark of my 30-year loan and my all principle is paid off, do I still have to pay the remaining interest associated with my next 20-years worth of payments? In other words do I still have to pay the remaining interest on the loan or do I still have to pay off the entire amount of the loan including principle and interest?

    The reason why I am asking is because I called the company which I make my mortgage payment to and they stated I would have to pay off the remaining amount of interest on the loan in this scenario…. I believe they gave me false information but I wanted to make sure.

  7. Colin Robertson May 20, 2017 at 7:12 am -


    Assuming you’ve never refinanced, and you just made the regular principal and interest payment every month, just plug in the original loan amount and interest rate into an amortization calculator and scroll down to the month you’re currently in to get an idea of what your current balance is. If it has been 20 years, you might be around month 240.

  8. Peach May 19, 2017 at 1:19 pm -

    I have been in my home for 20 yrs. I paid $96000 and my principal payment is $520.00 a month. How much interest am I still paying a month? The rate I am at is 7.5%.
    I don’t even know what I owe on the house, but guessing about $34000… ?

    Okay, my friend just told me that my terminology was wrong on saying ” principal ” payment. The $520.00 a month is is my house payment before all the insurance and other garbage is tacked on. Hope that clarifies my question. Please help

  9. Colin Robertson May 10, 2017 at 2:52 pm -


    Yes, if you have the same balance and make the same monthly payment over the same time period (15 years), the same amount of interest would be paid if the rates were the same. But like you said, you could potentially save with a lower interest rate on a 15-yr or 10-yr. To offset that rate improvement, you’d have to make an even larger payment each month on the 30-yr fixed to extinguish the loan in 180 months. Note that the refinance would also lock you into making that larger payment, whereas the 30-year provides choice each month.

  10. Jay May 9, 2017 at 5:12 pm -

    Hello Colin,
    I am being a bit lazy doing the actual calculation myself. My question is if you were to make monthly payments equivalent to 15 yr fixed even though you have a 30 yr fixed, would the total amount of interest payment be about the same, aside from the difference that comes from the interest rate difference? My interest rate for 30 fixed was 3.875. Upon current rate lookup, 15 fixed is about 3.5 and 10 fixed at 3.25. But with additional fees involved with refinancing, I am not sure if refinancing is still a much better option with lesser cash availability for other savings, eg. second property purchase down payment. I would appreciate your advice. Thanks.

  11. Colin Robertson April 4, 2017 at 11:06 am -


    Good point about inflation, though not everyone looks at things that way. There are generally two camps – the people who want to be mortgage-free ASAP and those who believe there are better uses for their cash.

  12. Jonathan April 3, 2017 at 10:14 pm -

    I think everyone is making a big mistake here; all the old school businessmen would tell you that never pay a money today that you can pay tomorrow. Of course in a 15 years period you pay less interest as compared to 30 but the fact is you are poorer every month by half the amount of your monthly payment, meaning that extra money could go towards your life style, better food, school, trips etc etc. The extra interest you pay over 30 years is easily compensated by inflation or your house added value over the years. You just have lived all these years with less monthly income with a 15 year mortgage.

  13. Rosalie E. March 21, 2017 at 8:46 pm -


    Not sure if it is to our best interest to refinance. I have been trying to research a break even point and I just can’t get my head around it. We bought a house in 2005 on an interest only 5/1 ARM. I looked up historical data on the interest for the month of 10/2005 and it was 5.817%. The original loan was 450,000. We have been paying off both interest and principal since we bought the house. It is now down to 338,000. Do you think you can help us figure out if the quote for a 15 year fixed rate at 3.6% is worth it to refinance? Our current monthly is 2783.05 and I always pay 300 over. Our current rate is 3.5%. Sometimes when we have extra money, I pay more. We have a 2nd mortgage that will be paid off in 2 years and it will free $1750 to go towards this bigger loan.

  14. Colin Robertson March 3, 2017 at 10:22 am -


    If used for down payment it’s locked up in the house, if you keep it and go zero down you can decide what you’re comfortable putting into the home after the fact. But the interest rates might differ for zero down vs. putting up a large down payment. It also depends on how liquid you want to be vs. potentially cash poor. There’s also a potential middle ground I suppose. Good luck!

  15. Kate March 1, 2017 at 2:04 pm -

    Hi Colin, This is such a helpful article. My husband and I are considering purchasing a property for $610K using a 30year VA loan at 3.635% interest rate. We can get 0% down (with no funding fee, and no PMI, with no penalty for early payoff). We will have a chunk of cash that we had saved for a down payment $30-50K in the bank afterwards. Would you recommend putting that towards the principal in the first year vs using it as a downpayment to lower the loan amount?

  16. Colin Robertson February 16, 2017 at 10:21 am -


    Hard to say without knowing all the details, but it might be something to do with the lower modified monthly payments resulting in deferred principal and a balloon payment. Basically the payments you’re making now might not be sufficient to pay off the entire balance by maturation.

  17. Maria February 15, 2017 at 9:45 pm -


    I have a 30 year fixed mortgage. The original loan amount is $100,000. I am on year 10. Due to a loan modification, the bank change the maturity date from 08/2037 to 10/2037. All the modification did was lower my interest rate. I do not understand why my amortization schedule shows that I will have a balance of about $55,000 on the maturity date.

    Hope you can help me since the the rep from the mortgage servicing was not able to explain this as well. He submitted it for further research.

    Thank you.

  18. Colin Robertson February 15, 2017 at 3:29 pm -


    I don’t understand your question.

  19. Liz Rowe February 13, 2017 at 7:09 am -

    Hi! I have a question. If a yearly on the new 30-year,$75,000 mortgage is $7,300 and the payment is made at the end of each of the next 30 years. Suppose that the payment is made at the end of each month. Would 12 of these monthly payments be equal to one of the yearly payments?

  20. Colin Robertson January 30, 2017 at 4:44 pm -


    If you have a rate of 9%, you could potentially save a lot of money with rates being a lot lower these days. However, you do need to look at your remaining loan balance and the total interest that will paid if you don’t refinance versus the savings if you do decide to refinance. Also you may not want a long mortgage, and instead a 10-year fixed or shorter to avoid resetting the clock.

  21. Sherrij January 29, 2017 at 3:12 pm -

    I have 7 years left on my mortgage, the interest rate is 9%. I have cleaned up my credit and have a good score now. Should i refinance? I really need to do some home repairs and want to lower my monthly payments. What are my options?

  22. Colin Robertson January 24, 2017 at 9:43 pm -


    Probably best to just call the servicer and get the info from the horse’s mouth, but theoretically, yes, a new interest rate means a new amortization schedule to accurately estimate the payoff. And the principal amount would change each month anyway as the loan is paid down, though a dramatic drop in principal signifies a new, higher interest rate.

  23. K January 18, 2017 at 12:45 pm -

    I have a question. I understand the info above, I was in the mortgage business for 16 years on the processing and closing end.

    My husband got a 5/1 arm in 2005 when the rates were low and it’s been pretty good. I’ve been watching the market in case we should Refi. I pay extra every month on the principal.

    My question is…
    The rate just adjusted up. I noticed that the old amount going to principal was 254.83 and with the new payment only 229.17 to principal.

    …so, the amortization resets every time a new rate is introduced? Can you tell me what is happening? I tried googling but nothing specific comes up.

  24. Colin Robertson January 16, 2017 at 9:15 am -


    If you’re already halfway through a 30-year loan, it might not make sense to get another 30-year loan, unless you can’t afford the payments of a new 15-year fixed loan. You may want to see what 15-year fixed costs, could be cheaper (lower rate), but you’ll have no choice but to make the larger, 15-year payment every month if you go with it. So the new 30-year term would give you more flexibility to make the standard payment, or pay $1,200 or so as they suggested to pay it off in half the time. Use a mortgage amortization calculator to try out different loan scenarios with your loan amount and 30-yr terms and 15-yr terms and different interest rates.

  25. Rose January 15, 2017 at 7:20 pm -

    I’m 12 years 6 months into a 30 year 6.75 interest mortage.$1227.41 monthly payments. Loan was 178.000 balance owed is 125.000. I was offered 4.90 % for 30 years to refinance @ $917. Per month and was told if I pay $1200. A month I could pay off in 15 years or $1600 in less both payment by weekly. PLEASE I DONT QUITE UNDERSTAND. How do I find out about Amortization of my loan and should I take the offer?

  26. Colin Robertson January 14, 2017 at 11:50 am -

    Sounds about right…good luck!

  27. Ladi January 13, 2017 at 9:49 pm -


    Thank you so much! I will try that. I did called my mortgage company to explain it to me and I ask to speak to the payoff department but she tried to explain it to me but I don’t think she knows anymore than I do! LOL

  28. Colin Robertson January 12, 2017 at 4:08 pm -


    Those two numbers are the same (I assume) because your deferred interest balance is $0, so any number plus zero will not change that number. If you think your balance should be lower, put your original loan amount into an amortization calculator and scroll down to the month you’re currently in to see what the balance is (assuming you didn’t make any extra or miss payments).

  29. Ladi January 12, 2017 at 1:20 pm -

    My amortization schedule shows:

    Due Date

    Computed Interest Due

    Principal Due

    Deferred Interest 

    Principal Bal ­ 
    Deferred Interest 


    I called and ask to explain why the Pay Off Amount and the Outstanding balance is the same with the deferred interest in it. She really didn’t make it clear. I thought my payoff balance would be lower than the $50,334.75. The Amortization Schedule shows as the payments are made the balance is less and less. Could you please explain this to me. Thanks so much!

  30. Colin Robertson January 10, 2017 at 9:50 am -


    If you’ve been making interest-only payments this entire time, your original loan balance should be unchanged. So if it started at $200,000, it would still be $200,000, because no principal was paid. That means you’ll have 20 years to pay the original balance, with payments amortized over the 20-year period. That means they’ll have to rise to pay off the loan in a shorter period unless you refinance into a new 30-year loan.

  31. Rob January 9, 2017 at 2:14 pm -

    We got a 30 year mortgage in 2007 that started as a 5/1 and since the rates have been low (based on LIBOR), it still adjusts every year and has stayed fairly low. Unfortunately, the first 10 years are “interest only” payments. It is not a negative amortization loan. Once we hit that 10 year point, does all that interest we’ve been paying count when we start paying principle? How can we find out how much of an impact the additional principle will be on our current payment? The amortization schedule provided on the loan is based on a much higher interest rate (aka 2007) then we have today. Thanks!

  32. Patricia Riggleman December 27, 2016 at 9:51 am -

    Perhaps people aren’t as ignorant as some might think, and I’m not saying that any of you here are saying that!
    Perhaps people are aware and are in a 30 yr. fixed because that’s the only way they can afford to pay their mortgage payments,or perhaps,like in my case their income is Seasonal,and therefore making it much more difficult putting the money together, especially if you have a Tractor loan, & a business loan, farming is expensive and crops are seasonal, so I think a lot of people understand, but they due what they have to do .

  33. Colin Robertson December 21, 2016 at 12:38 pm -

    A Kirmkman,

    Yes, a loan needs to be paid in full, including interest and principal, before the bank considers it repaid. If it turns out you overpaid they should be able to cut you check for the difference.

  34. A Kirkman December 21, 2016 at 8:42 am -

    In all types of mortgages, are you (must you?) actually repay the entire amount borrowed? For example, I borrowed $30,000 to purchase my house. I have made a LOT of extra principal payments, (and never refinanced), which, other than the first year or so, I marked on my check what the amount of the extra principal paid, was.

    If I add up the amount I have paid for principal, according to MY good record-keeping, must it come to $30,000 before my loan can possibly be paid off? I would think the answer is yes, but I’m wondering about it.

    If you have already explained this, I apologize for having you repeat the answer, but please do, in an email to me, if possible. I have a 30-year fixed rate loan at 6% with no penalty for paying it off early.

    If it turns out that I have been cheated (by the bank?), will I be able to get the extra money I have paid, back? and without having to sue the bank?

    Thank you very much for your help.

  35. Colin Robertson December 15, 2016 at 11:59 am -


    If you know for sure you’ll refinance without question in three years you could technically go with an even shorter-term ARM like the 3/1 or 5/1 ARM and get an even lower rate. The big question is where rates will be in three years when it’s time for your refi, but if you’re 100% going to refi at that time it’s not really part of the debate…

  36. Carolina December 15, 2016 at 10:25 am -

    Hi Colin,

    we are about to purchase our first home in NYC. If we plan on refinancing within the next 3 years to make some home improvement, do you suggest a 10 year ARM vs a 30 year fixed?
    Pros & Cons?
    Thank you.

  37. Colin Robertson December 6, 2016 at 1:34 pm -


    You should see a lower outstanding principal balance that reflects the extra payments, but not necessarily an early payoff.

  38. dan December 3, 2016 at 10:38 pm -

    If extra payments are made shortening the loan but no immediate reduction is visible on the statements, Are the bank keeping a separate record of this? Sounds like more work for them which they’d want to charge for. Do they?

  39. Paul November 28, 2016 at 9:03 pm -

    Hi Colin-
    Do you have (or know of) a calculator that doubles the *amount of principal* paid each month in addition to the regular payment? I’d like to pay the regular payment PLUS whatever amount is going toward principal that month, and see how quickly the payment schedule shortens.

    Great stuff here, btw. Thanks for taking the time to write thoughtful answers for people with genuine questions.

  40. Colin Robertson October 20, 2016 at 2:29 pm -


    The larger payments won’t change the amount due on the future payments, but it will save on interest. If your payment is $1,000 a month, it’ll still be $1,000 a month for subsequent months, but the loan will be paid off earlier with extra payments.

  41. Paul Delavergne October 20, 2016 at 12:49 pm -

    Here is my situation and question. I am about to buy a house. Getting a 30 yr fixed at 3.375 and I am about to have 3 children in college. Therefore I am not paying for college yet but will be in about 3 years. My plan is to get my amortization schedule from my lender as soon as I close. Then for payment 1 I will make the full payment plus the principal of payment #2. Therefore my next payment would essentially be payment number 3(right?) Then for the next payment I would do the same thing. Full payment plus the principal of payment #4. Then I would do this until I need to start making college loan payment and save a lot of interest in the beginning of the loan. Good Idea and your thoughts?


  42. Colin Robertson August 22, 2016 at 8:36 pm -


    It sounds like a very serious situation and if you feel you’re being wronged it might make sense to contact a housing counselor, the Consumer Financial Protection Bureau (CFPB), or potentially an attorney.

  43. KarenJean Alice Strantz August 18, 2016 at 9:43 pm -

    I live in MN and 12 years ago I was desperate as my well and septic system quit and I could not get a loan as I lived in a 100-year old house on 10 acres of land. I found a manufactured home dealer who said he could get me a loan and so I went with them. It was a negative amoritization loan which I did not know of. They did not want me to get a lawyer on my behalf so I did not. Now my original loan amount was paid off they said quite a while ago and I owe them interest. They indicated they felt they were to get $200,000 in interest off of me. Now I’m trying to get a loan to pay off the $120,000 they want and I’m having trouble. I believe these people because of their bullying and 11% interest rates and high projected monthly payments are predatory lenders. What can I do? Someone told me if I went to the attorney general in MN I might not have to pay off anything. What is your opinion in this matter. Thank you.

  44. Colin Robertson August 15, 2016 at 11:41 am -


    It depends on your financial goals – if it’s to pay the mortgage off as soon as possible then the more you pay toward it the better. But you may want to put money into other investments as well. You may also want to consider shorter-term mortgages if your goal is fast payoff and you have available cash.

  45. Sonia August 11, 2016 at 10:52 am -

    Hi Colin,

    Great blog, and thank you for the information. My husband and I just sold our home, and we did well. Now the question is should we refi our current loan we have for our new home, or put the amount we gain from the sale of the home without refinancing the current loan? it is going to be a very large amount, so we are not sure which way to proceed. Also, the new home was purchased only 3 months ago, so we are in a very stages of the repayment. We would like to make a wise decision with our loan with the new home, since we very fortunate and were able to pay off our last house in 16 yrs, after purchasing it on 30 yrs fixed loan. Would love to pay this one off too as soon as possible. Thank you!

  46. Colin Robertson August 9, 2016 at 1:13 pm -


    You say you’ve only had the existing loan for two years…so it doesn’t stretch out the amortization too long, 32 years versus 30. A breakeven calculator will allow you to determine when the savings would kick in…shouldn’t take too long if monthly payment is around $85 less and out-of-pocket cost is $1700.

  47. Eldin August 5, 2016 at 12:35 pm -

    I have a question. I have a 30 year loan at 4.0% that I have acquired in 09/14. I am thinking of refinancing and have an offer on the table for a 30 year at 3.25% and origination would be around $1700. I started the initial 30 year with 166 600 and now the payoff would be around 160100.
    If I refi, I can lower the payment, but I would restart at 30 years. When I take into account all the interest I have already paid on top of restarting at 30 years again, is the 3.25 loan for $1700 worth it? How long before I truly am in the black? my current payment is around 795 I think and the 3.25 would push it down to around 710 or so.

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