Yo, what’s up, mortgage fam! Ever wondered how much adding an extra $10,000 to your mortgage would bump up your monthly payments? Well buckle up because we’re about to dive deep into the world of mortgage math and answer that burning question for you.
First things first, let’s grab some tools. We’ve got two awesome resources at our disposal:
- Mortgage Payment Calculator – NerdWallet: This bad boy lets you plug in your loan details and see how much you’d pay each month.
- Current Mortgage APR Annual Interest Payments Per Thousand Dollars Borrowed Calculator: This gem helps us figure out how much each additional $1,000 adds to your monthly payment.
Alright, let’s get down to business. Say you’ve got a 30-year mortgage at 7.25% interest and you’re looking to borrow $320,000. Without that extra $10,000, you’d be looking at a monthly payment of $785.87 and a total loan cost of $790,26707.
But wait, there’s more! If you throw in that extra $10,000, your monthly payment jumps to $813.87. That’s an increase of $28 per month which might seem like a lot but hold your horses.
The best part is that, by adding that extra $10,000, you’ll end up saving a ton of money over time. Your total loan cost drops to $744,267. 07, which implies that over the course of the loan, you will pay $46,000 less. That’s a pretty sweet deal, wouldn’t you say?.
But wait, there’s even more! Let’s break it down even further. With that extra $10,000, you’ll be paying $8. 14 per month for every $1,000 you borrowed. That’s compared to $8. 24 per month without the extra cash. During the loan’s term, the additional $10,000 results in savings of $2,470. 86 for every $1,000 you borrowed.
So, what’s the takeaway? Adding an extra $10,000 to your mortgage might bump up your monthly payments, but it can also save you a ton of money in the long run. It’s all about finding the right balance that works for you.
Now, let’s take a quick detour to the land of investment opportunities. If you are considering contributing an additional $10,000 to your mortgage, you may want to think about your other options. The US equity market has historically returned around 9. 2% per year over the past 140 years. That’s not too shabby, right?.
Of course, there’s no one-size-fits-all answer. The best option for you will depend on your individual circumstances and financial goals. But by understanding the impact of adding extra money to your mortgage, you can make an informed decision that’s right for you.
And remember, fam, we’re always here to help! If you have any questions about mortgages or anything else related to your finances, don’t hesitate to reach out. We’re just a click away, ready to guide you on your financial journey.
Comparing common loan types
With NerdWallet’s mortgage payment calculator, comparing popular loan kinds and seeing how each one impacts your monthly payment is simple. We use Zillow to obtain the most recent weekly national average interest rate, allowing you to compute and contrast the monthly payments for a 30-year fixed, 15-year fixed, and 5/1 ARM with accuracy.
To pick the right mortgage, you should consider the following:
How long do you plan to stay in your home?
How much financial risk can you accept?
How much money do you need?
Because the interest rate on a fixed-rate loan never changes, this could be your best option if you’re established in your work, have a growing family, and are prepared to establish some roots. A 15- or 30-year fixed rate loan
Generally speaking, a 30-year fixed loan will have the highest interest rate but the lowest monthly payment. But if you choose a 15-year fixed, your payment will be higher, but you’ll pay less interest, accumulate equity, and pay off the loan more quickly.
There might be some fluctuation over time if additional costs, like annual property taxes or homeowners association dues, are included in your monthly mortgage payment.
5/1 ARMs and adjustable-rate mortgages: These are typically more appealing to younger, more mobile buyers who intend to refinance when the teaser rate is about to expire or stay in their homes for a short period of time.
These loans have interest rates that reset at specific intervals. They typically begin with lower interest rates than fixed-rate loans, sometimes called teaser rates. Following the end of the initial term, an index plus a margin will determine how much the interest rate and monthly payment will change each year.
In those early years, paying a lower interest rate could result in monthly savings of hundreds of dollars, which could then be used to fund other investments. But be careful. Depending on the terms of your loan, your interest rate and monthly payment may rise significantly after the introductory period, which may last three, five, seven, or even ten years.
What are my monthly costs for owning a home?
There are five key components in play when you calculate mortgage payments
- Principal: The amount of money you borrowed for a loan. Your principle is $200,000 if you take out a loan for $200,000 in total.
- Interest: The cost of borrowing money from a lender. Interest rates are expressed as a yearly percentage. Throughout the initial years of your mortgage, the majority of your loan payment is interest.
- Property taxes: The annual amount that the owner of a home must pay to the city or municipality Property taxes are regarded as a component of the expense of home ownership and ought to be taken into account when figuring out monthly mortgage payments. But as lenders have no control over this expense, it shouldn’t play a significant role in your decision to work with a lender.
- Mortgage insurance is an extra expense associated with getting a mortgage if your down payment is less than 2020% of the total cost of buying a home. This safeguards the lender in the event that a mortgage borrower defaults. You will no longer need to pay mortgage insurance once the equity in your property reaches 2020%, unless you have an FHA loan.
- Homeowners association fees: Condo owners and some single-family neighborhoods typically incur these expenses. It is money that owners are required to give to a group that helps with maintenance, enhancements to the property, and common areas.
Remember that there are additional upfront expenses in addition to your down payment, in addition to the monthly costs shown in our mortgage payment calculator. These costs include property and loan related fees, insurance and title fees. Find out more about mortgage closing costs.
How To Calculate Your Mortgage Payment
FAQ
How much does a mortgage payment increase for every $1000?
How much does mortgage go up per 100000?
What happens if I pay an extra $1000 a month on my mortgage?
What happens if I pay an extra $10000 a year on my mortgage?
Should you add a mortgage payment a month?
Adding just one extra payment a month will help you be mortgage-free sooner and save you potentially thousands in interest. Eliminate your monthly mortgage payment and enjoy the additional cash flow. No longer having a mortgage payment means you can now use those funds to invest.
What is a mortgage payment calculator?
A mortgage payment calculator is a powerful real estate tool that can help you do more than just estimate your monthly payments. Here are some additional ways to use our mortgage calculator: Adjust your down payment size to see how much it affects your monthly payment.
How much money do you need to pay off a mortgage?
A: Of course, this answer depends on the amount of your loan and your standard monthly payment. But for example, if you take out a 30-year loan of $300,000 and your monthly payment is $1,454, you would need to pay an additional $800 onto your principal amount to pay your loan off in 15 years.
What is a typical monthly mortgage payment?
The traditional monthly mortgage payment calculation includes: Principal: The amount of money you borrowed. Interest: The cost of the loan. Mortgage insurance: The mandatory insurance to protect your lender’s investment of 80% or more of the home’s value. Escrow: The monthly cost of property taxes, HOA dues and homeowner’s insurance.