Last month (August):
Years left: 10.25
P = $743.63, I =$470.77, Escrow = 591.95
This month (September):
Years left: 10.08333333
P = $749.32, I =$465.08, Escrow = 591.95
One months savings from this month’s prepayment: ~$2.75.
We refinanced from one year into a 30 year loan at 5.5% (down from 3 years into a 30 year loan at 6.5% the previous year) to a 20 year loan at 4.75% exactly one year ago. At that point there was $187,923 remaining from our original balance (today, 116,051.70).
In the past 12 months, we have paid $71,871 to the mortgage company. $63,828 of that was extra pre-payment. We have cut almost 10 years off our mortgage with these prepayments. This cut results in a savings on interest of around $66K over the life of the loan.
The bulk of that prepayment was in two lump sums at the beginning of the period– the first was savings we had made over the previous 4 years for a specific purpose, but no longer needed. The second was from consolidating and closing out some savings accounts and other financial vehicles.
We will not be able to make that size prepayment again. Also, our big lumps from consulting and unexpectedly high tax refunds are unlikely to hit us this year as we have nothing in the works for consulting and our taxes should be pretty straight-forward this year. Our expenses are also going up this year– no raises, private school instead of (tax-deductible) preschool, much more expensive benefits packages (less benefit at twice the cost!)
If we decided to pre-pay the mortgage instead of funding a 457 or saving up for infertility treatment, the most we could expect to prepay would be around $19K. And that is unlikely. Additionally, since we’re pretty well into the loan, if we paid off the entire loan tomorrow, we would only be saving $30K in interest over the remaining life of the loan (which is a nice amount of money, but prorated over the 19 remaining years of our loan, or even the 10 left from prepayment… not big enough to throw everything at).
So… ready for some boring mortgage updates for the next 10 years or so? At least it reminds me to talk about spending, saving, and housing. Maybe we’ll start getting raises again some day. Hahahaha. That sure would be nice. Possibly we’ll end up moving before then. *Sigh.*