Are these calculations correct?
Assume I have a mortgage of 160,000 over 27 years at 1.5%, i.e. 600/month
If I want to pay off 15,000... then it will reduce the term by 36 months. Therefore saving 600*36 = 21,600. (le'ts also assume the payment is being made as close the the beginning of the mortgage as will make no difference)
If instead I reduce the montly payment it would become 145,000 over 27 years at 1.5% i.e. 500/month. Savings would be 100*12*27 = 32,400
Is it always better to take the reduced monthly payment or am I doing something wrong?
Assume I have a mortgage of 160,000 over 27 years at 1.5%, i.e. 600/month
If I want to pay off 15,000... then it will reduce the term by 36 months. Therefore saving 600*36 = 21,600. (le'ts also assume the payment is being made as close the the beginning of the mortgage as will make no difference)
If instead I reduce the montly payment it would become 145,000 over 27 years at 1.5% i.e. 500/month. Savings would be 100*12*27 = 32,400
Is it always better to take the reduced monthly payment or am I doing something wrong?