Can splitting mortgage payment help you shave 10 years from 30 year loan?

[DCRogers]

jamsvet has it right… It’s called the “Bankers Secret”; another formulation is: look at your principal payment, and pay double that (with the interest) each month.

Two comments.

1) You don’t need software to do this. Just the cash to pre-pay.

2) You can’t get a significant advantage with timing schemes. If you want to shorten your mortgage, here’s the shocking tip: pay more each month.

The worst effect of this damn bubble is that people saw neighbors buying Escalades and yachts with their HELOCs and, rather than being reinforced into paying their debts off, one painful dollar at a time, threw caution to the wind and joined the party. A dead-man’s party.

DCRogers

[DCRogers]

jamsvet has it right… It’s called the “Bankers Secret”; another formulation is: look at your principal payment, and pay double that (with the interest) each month.

Two comments.

1) You don’t need software to do this. Just the cash to pre-pay.

2) You can’t get a significant advantage with timing schemes. If you want to shorten your mortgage, here’s the shocking tip: pay more each month.

The worst effect of this damn bubble is that people saw neighbors buying Escalades and yachts with their HELOCs and, rather than being reinforced into paying their debts off, one painful dollar at a time, threw caution to the wind and joined the party. A dead-man’s party.

DCRogers

[DCRogers]

jamsvet has it right… It’s called the “Bankers Secret”; another formulation is: look at your principal payment, and pay double that (with the interest) each month.

Two comments.

1) You don’t need software to do this. Just the cash to pre-pay.

2) You can’t get a significant advantage with timing schemes. If you want to shorten your mortgage, here’s the shocking tip: pay more each month.

The worst effect of this damn bubble is that people saw neighbors buying Escalades and yachts with their HELOCs and, rather than being reinforced into paying their debts off, one painful dollar at a time, threw caution to the wind and joined the party. A dead-man’s party.

DCRogers

[Carlsbadliving]

FYI: This was in Men’s Health magazine. it specifically says:

“Banks compound interest every day, so not waiting till the midmonth due date will save you thousands over the course of your loan. Split your payment in half and send your bank a check every 2 weeks; it will cut 10 years off the life of a 30-year loan.”

[Carlsbadliving]

FYI: This was in Men’s Health magazine. it specifically says:

“Banks compound interest every day, so not waiting till the midmonth due date will save you thousands over the course of your loan. Split your payment in half and send your bank a check every 2 weeks; it will cut 10 years off the life of a 30-year loan.”

[Carlsbadliving]

FYI: This was in Men’s Health magazine. it specifically says:

“Banks compound interest every day, so not waiting till the midmonth due date will save you thousands over the course of your loan. Split your payment in half and send your bank a check every 2 weeks; it will cut 10 years off the life of a 30-year loan.”

[Carlsbadliving]

FYI: This was in Men’s Health magazine. it specifically says:

“Banks compound interest every day, so not waiting till the midmonth due date will save you thousands over the course of your loan. Split your payment in half and send your bank a check every 2 weeks; it will cut 10 years off the life of a 30-year loan.”

[cr]

“Banks compound interest every day, so not waiting till the midmonth due date will save you thousands over the course of your loan. Split your payment in half and send your bank a check every 2 weeks; it will cut 10 years off the life of a 30-year loan.”

Has anyone here actually done this?

[cr]

“Banks compound interest every day, so not waiting till the midmonth due date will save you thousands over the course of your loan. Split your payment in half and send your bank a check every 2 weeks; it will cut 10 years off the life of a 30-year loan.”

Has anyone here actually done this?

[cr]

“Banks compound interest every day, so not waiting till the midmonth due date will save you thousands over the course of your loan. Split your payment in half and send your bank a check every 2 weeks; it will cut 10 years off the life of a 30-year loan.”

Has anyone here actually done this?

[cr]

“Banks compound interest every day, so not waiting till the midmonth due date will save you thousands over the course of your loan. Split your payment in half and send your bank a check every 2 weeks; it will cut 10 years off the life of a 30-year loan.”

Has anyone here actually done this?

[patientlywaiting]

“Banks compound interest every day, so not waiting till the midmonth due date will save you thousands over the course of your loan. Split your payment in half and send your bank a check every 2 weeks; it will cut 10 years off the life of a 30-year loan.”

I tried so I know well. No. They do not.

Here’s an example of a $100,000 loan at 10%. It does not matter when you make the monthly payments. You owe 1 month month interest regardless of when you make the payment.

For the year, your total PI payments are $10,530.86. Unless your total payments are MORE than that for the year, there is NO WAY your principal balance can be reduced any faster.

The interest payments will always = Beginning Principal * interest rate / 12. The extra goes to principal. That is regardless of when you make your mortgage payments.

If you cut your monthly payment in 2 halves, the first half payment will be applied all to interest with no affect on your principal balance.

Try it with your own mortgage.

Beginning balance before each payment of $877.57
$ 100,000.00
99,955.76
99,911.15
99,866.18
99,820.82
99,775.09
99,728.98
99,682.48
99,635.60
99,588.32
99,540.65
99,492.59

Interest Payments
$833.33
832.96
832.59
832.22
831.84
831.46
831.07
830.69
830.30
829.90
829.51
829.10

Principal Payments
$44.24
44.61
44.98
45.35
45.73
46.11
46.50
46.88
47.27
47.67
48.07
48.47

[patientlywaiting]

“Banks compound interest every day, so not waiting till the midmonth due date will save you thousands over the course of your loan. Split your payment in half and send your bank a check every 2 weeks; it will cut 10 years off the life of a 30-year loan.”

I tried so I know well. No. They do not.

Here’s an example of a $100,000 loan at 10%. It does not matter when you make the monthly payments. You owe 1 month month interest regardless of when you make the payment.

For the year, your total PI payments are $10,530.86. Unless your total payments are MORE than that for the year, there is NO WAY your principal balance can be reduced any faster.

The interest payments will always = Beginning Principal * interest rate / 12. The extra goes to principal. That is regardless of when you make your mortgage payments.

If you cut your monthly payment in 2 halves, the first half payment will be applied all to interest with no affect on your principal balance.

Try it with your own mortgage.

Beginning balance before each payment of $877.57
$ 100,000.00
99,955.76
99,911.15
99,866.18
99,820.82
99,775.09
99,728.98
99,682.48
99,635.60
99,588.32
99,540.65
99,492.59

Interest Payments
$833.33
832.96
832.59
832.22
831.84
831.46
831.07
830.69
830.30
829.90
829.51
829.10

Principal Payments
$44.24
44.61
44.98
45.35
45.73
46.11
46.50
46.88
47.27
47.67
48.07
48.47

[patientlywaiting]

“Banks compound interest every day, so not waiting till the midmonth due date will save you thousands over the course of your loan. Split your payment in half and send your bank a check every 2 weeks; it will cut 10 years off the life of a 30-year loan.”

I tried so I know well. No. They do not.

Here’s an example of a $100,000 loan at 10%. It does not matter when you make the monthly payments. You owe 1 month month interest regardless of when you make the payment.

For the year, your total PI payments are $10,530.86. Unless your total payments are MORE than that for the year, there is NO WAY your principal balance can be reduced any faster.

The interest payments will always = Beginning Principal * interest rate / 12. The extra goes to principal. That is regardless of when you make your mortgage payments.

If you cut your monthly payment in 2 halves, the first half payment will be applied all to interest with no affect on your principal balance.

Try it with your own mortgage.

Beginning balance before each payment of $877.57
$ 100,000.00
99,955.76
99,911.15
99,866.18
99,820.82
99,775.09
99,728.98
99,682.48
99,635.60
99,588.32
99,540.65
99,492.59

Interest Payments
$833.33
832.96
832.59
832.22
831.84
831.46
831.07
830.69
830.30
829.90
829.51
829.10

Principal Payments
$44.24
44.61
44.98
45.35
45.73
46.11
46.50
46.88
47.27
47.67
48.07
48.47

[patientlywaiting]

“Banks compound interest every day, so not waiting till the midmonth due date will save you thousands over the course of your loan. Split your payment in half and send your bank a check every 2 weeks; it will cut 10 years off the life of a 30-year loan.”

I tried so I know well. No. They do not.

Here’s an example of a $100,000 loan at 10%. It does not matter when you make the monthly payments. You owe 1 month month interest regardless of when you make the payment.

For the year, your total PI payments are $10,530.86. Unless your total payments are MORE than that for the year, there is NO WAY your principal balance can be reduced any faster.

The interest payments will always = Beginning Principal * interest rate / 12. The extra goes to principal. That is regardless of when you make your mortgage payments.

If you cut your monthly payment in 2 halves, the first half payment will be applied all to interest with no affect on your principal balance.

Try it with your own mortgage.

Beginning balance before each payment of $877.57
$ 100,000.00
99,955.76
99,911.15
99,866.18
99,820.82
99,775.09
99,728.98
99,682.48
99,635.60
99,588.32
99,540.65
99,492.59

Interest Payments
$833.33
832.96
832.59
832.22
831.84
831.46
831.07
830.69
830.30
829.90
829.51
829.10

Principal Payments
$44.24
44.61
44.98
45.35
45.73
46.11
46.50
46.88
47.27
47.67
48.07
48.47

[Author]

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