Basic 30 Year Mortgage Early Payoff Analysis – [Microsoft Excel Amortization Template] Included –


hey guys Mike here of MK chip in today's video I'm going to be showing you a quick way to analyze your thirty-year mortgage that you may have never considered a lot of people ask me Mike should I pay off my mortgage early Mike when should I pay off my mortgage or you know how fast should I pay it off this video and this information is going to help you analyze your mortgage from a different angle that maybe you haven't analyzed before because after all we want to use your buckets of cash as wisely as we can man I would be so loaded if this was real money and not just some bucket of cash and bought from Walmart don't laugh at me I seriously bought a bucket of cash from Walmart okay so in this example we're looking at adding home we're going to pretend we purchased a home for a hundred seventy-five thousand we've made a 20 percent down payment of thirty five thousand and so we are now stuck with a beautiful thirty-year mortgage balance of one hundred and forty thousand dollars so in this example we're going to be looking at one hundred and forty thousand dollar mortgage now it doesn't matter whether the what the mortgage amount is or what mortgage interest rate we're paying in this video because proportionally it's going to be the same for any thirty-year mortgage now let's go over and let's analyze this alright so using an Excel template I found online I wanted to use the Excel template specifically because you guys can actually go download this for yourself and it's super easy to use all you need is Excel and if you don't have Excel there's other templates or other apps on your phone I'm sure you can find to run this type of analysis so what if I asked you guys how long you think it would take until you paid 25% of the total interest on this mortgage what do you guys think well you first of all you think well that's easy Mike you just take thirty times twenty-five percent and that should be the correct number of years right wrong actually after five years only you would have paid twenty-five percent of your mortgage interest at that point so how soon do you have to pay off your mortgage in order to save 50% of the total mortgage interest well 30 years mortgage the low half of 30 years is fifteen years that's got to be if I pay it off for 15 years that should save me 50% of my mortgage right wrong wrong again actually after ten years only you would have paid 50 percent of your mortgage interest to the bank already at that point now and of course if we continue this further how long how many years do you have to wait and tell you and pay a total of seventy five percent of your total mortgage interest balance well as after about 20 or 41 years so it's really different than what you might have originally thought okay to find this template that I'll be showing you guys in this video you can come to this page and use I'll show I'll leave this in the description below so that you can go directly to this page and you're going to hit the download button right here to get a loan amortization schedule template that's already been made from you from that point all you do is come here and then you're just going to drop in the value of your loan amount or your mortgage amount the interest rate you want to use in this case I'm using three point six to five percent this is a period of 30 years in this case our for this video if you wanted to do a 15-year you totally could you just drop it in 15 years right there we're going to say that we're only doing 12 payments per year which is one payment per month and just for kicks we're saying we're starting a loan as of one one 2013 and then once you have that information in there what it does is it generates the payment amount your monthly payment amount for your mortgage it says the number of payments 360 and then of course the total interest on the mortgage itself which you can find that under the cumulative interest column so if we scroll all the way down if we were to follow this schedule to the T this amortization schedule we would have paid eighty nine thousand eight hundred forty nine dollars eighty six cents after 30 years but having this mortgage now the quick and easy way to find out you know how much your mortgage is costing you and over what period of time is really I've done this quick analysis and you can do this too it's super simple you just have to have basic knowledge of how to use Excel so the first column I look at it what percent of my total mortgage interest that I pay so I first I'm interested in at what point do I pay 25 percent of my total mortgage interest so 25% of the total mortgage interest as of course twenty two thousand four hundred sixty two dollars and so what I do to find that and I say it's five years here what we do is we know that 25 percent is two twenty two thousand dollar amount so I scroll down here and looking at the cumulative interest column and also paying attention to the date column so we started in 2013 of January of 2013 we go down to accumulative interest once we get to this point where humans of interest is around 22,000 that is when we've paid 25 percent of our total mortgage interest so really this happened sometime in 2017 almost 2018 so roughly four to five years in you pay twenty five percent of your mortgage interest go back up to the top so what about 50 percent of your mortgage interest well fifty percent of the total mortgage interest it would be forty-four thousand dollars in this case and that occurs in about ten years so using the same concept focusing on the total cumulative interest column we're just going to scroll down we're looking for around forty four thousand dollars and I've marked it it's in this region and then we are now on now we're in 2022 we started our mortgage loan and 2013 so roughly nine to ten years at that point you've paid fifty percent of your mortgage interest and you could do the same if you wanted to find out what amount you you know in total you paid seventy five percent but but really it would have heard all I'll say the time about 21 years in you'll have paid seventy five percent of your mortgage interest as I said previously so that's just a quick way to analyze this and to help you decide if you should you know how fast you want to pay it off when you should pay it off etc if you're trying to decide whether you should invest your money after mortgage hopefully this will give you a different perspective and of how this worked now let's go over to the next screen and let's see how much in total if we kept this mortgage how much more our homeland cost us if we just paid every payment just as we were instructed to so how much in total did we pay for this home with our thirty-year mortgage if the home originally cost us one hundred and seventy five thousand dollars and we followed the amortization schedule of our mortgage payment by payment to the T we would have paid an additional eighty nine thousand dollars or self interest so eighty nine thousand plus the one seventy-five that we originally purchased a home for gives us a grand total cost of this home of two hundred and sixty four thousand dollars eight hundred and forty nine cents that's a 51% increase roughly over the original purchase price of the home alright guys that was the quick and dirty mortgage interest analysis on a 30-year mortgage just to give you a little different perspective has how you might look at it or how MIT you might think about it when you're trying to make the decision if you should pay off your mortgage early or how fast you want to pay it off etc I hope that helps you guys if you haven't already subscribe you know what to do make sure you do that right now if you joined the video if you learned something new make sure you hit the like button before you leave share this information with a friend or family member especially one who's thinking oh my gosh do I need to pay off my home early or who's been thinking about paying off their mortgage I'm sure they would appreciate having this information of course I will leave a link to that spreadsheet I just showed you with that template in the comment section down below and in the description section down below so you can download it for yourself and use it to your advantage and until then until next time I hope you take this information you learned today and you use it to live your life fun cage love you all thank you for your support tonight we'll see you in the next video bye everybody peace you

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