The Benefits of a Mortgage Calculator
Have you tried out our mortgage calculator? It can be quite an eye-opening experience, especially if you don't think that saving a little on your interest rate makes a big deal to your mortgage.
Here's the scenario I worked with: my mortgage is about $100,000. I used that as a nice round figure. Then I put in a 20 year amortization. Then I tried a 6% mortgage rate and a 5% mortgage rate. The amount and the amortization period stayed the same.
At a 6% rate on my mortgage, my payment would be $716.43. I would pay a total of $171,943.20 to pay off the mortgage. That's $71,943.20 in interest.
Okay -- here's the same scenario at a 5% interest rate. My payment would be $659.95. That saves me almost $60 a month (which is a really nice evening out for the wife and me... or new skates for the future hockey-star son). But it gets even better over time! Not only do I save abour $60 a month, but that money adds up. Over the life of the mortgage, I pay $158,388 in order to pay it off. That means I've saved $13,555.20 over the life of the mortgage!
Now, while I get a tax deduction from Uncle Sam in the US for my mortgage interest, wouldn't you rather avoid paying it out in the first place? After all, you don't get a refund until long after the money has been paid. You could have been using that extra $60 bucks every month, instead of waiting on the IRS at the end of the tax year.
So, take some time and play around with different scenarios on our mortgage calculator. You might just save yourself a lot of money.