Have you ever wondered whether it is worth making extra payments into your home-loan account? And is there a way to actually calculate savings from extra loan payments?
These may seem tricky but it’s actually quite easy to calculate! In fact it’s easy to work out how many months sooner you can pay off your loan and how much interest that will save you! And then if you want you can compare that to investing and work out whether you should invest your money or pay your loan off.
In the long run it’s generally better from a financial perspective to invest any extra money you have, but there are other less obvious reasons that may sway you to rather pay your debt. Have a look at why I’ve decided to pay my home loan off early rather than invest. Things such as being debt free and the opportunities that creates. The peace of mind. The freedom.
I have a short course to help you calculate savings from extra loan payments. This will teach you how to actually do the calculations yourself in Excel and after doing the course you will be able to create a spreadsheet that suites your needs.
There are of course many free home loan calculators out there which you can use to get the same results, but this way you actually get to understand how they work and see the monthly effect of interest.