Assume we are able to pay our mortgage off in 15 years instead of 30.
Monthly Payment = $1479 base – not including taxes, possible PMI, etc. Total Paid After 15 Years = $266,288 After 15 years, we would have paid, $66,288 in interest to the bank. By cutting our mortgage time by half, we were able to pay $77,451 less in interest on our loan.
What if we had invested that $524 a month for those 30 years instead of reducing our mortgage time?
Investment = $524 a month, for 30 years at 8% compound interest Monthly Investment = $524 = $6,288 a year Total Investment After 30 Years = $769,310.82 after 30 years So if we did not pay extra on our mortgage, we would have paid an extra $77,451 in interest over the life of the loan.
The final scenario involves us paying our mortgage off in 15 years and not contributing to retirement during that time.
Investment = $1,479 a month, for 15 years at 8% compound interest Monthly Investment = $1,479 = $17,748 a year Total Investment After 15 Years = $520,447.38 after 15 year