January 30, 2015
You bet they do! In fact, it's amazing how even small additional payments can add up to big savings. Let's say you give up a take-out coffee each weekday, and use the savings to pay an extra $20 weekly into a loan of $350,000. You could save up to $30,700 in interest costs and be mortgage-free two years sooner (assumes rate of 6.0% pa and loan term of 25 years).
It works this way because every extra dollar comes straight off your loan principal, which in turn reduces the interest payable. It's a great way to get ahead with your loan. You can add up the savings you could make with the Extra Repayments Calculator on website https://www.mortgagechoice.com.au/chris.stampoultzis/calculators