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Mortgage Acceleration Example

Mortgage Acceleration Example

Michael Jensen, Mortgage and Finance Guru
, Mortgage and Finance Guru

    The graphs below illustrate the mechanics of applying mortgage acceleration to a fixed rate mortgage.  The example uses a $380,000 30 year fixed rate mortgage with a 4% interest rate.  The graph at the top of the page shows the amortization, or split between principal (dark blue bar) and interest (light blue bar), and mortgage balance (green diamond) for the mortgage with NO acceleration.  As you can see, you pay mostly interest at the beginning of the mortgage and mostly principal at the end of the mortgage and the mortgage balance is zero at the end of the mortgage, or year 30 in this example.

    The graph at the bottom of the page shows the impact of the borrower accelerating his or her mortgage by $200 per month.  As illustrated by the graph, the borrower pays down the principal amount of his or her loan faster, which results in a significant reduction in the length of the mortgage, mortgage payments and interest expense.  In the acceleration example, the mortgage is paid off in year 25, as opposed to year 30, which saves the borrower more than $55,000 in interest expense.

    Use your cursor to hover over the columns on the charts to magnify the numbers.

In the acceleration case (below), the mortgage is paid off in year 25, saving the borrower at least $55,000 in interest expense

Fixed Rate Mortgage Amortization Schedule

  • Principal
  • Interest
  • Mortgage Balance
Annual Principal and Interest Mortgage Expense Year End Mortgage Balance
  • $22,000 $400,000
  • $18,000
  • $14,000$300,000
  • $12,000
  • $10,000$200,000
  • $6.000
  • $2,000$100,000
  •  
  • null

    Year 1

    $373,308 15,078 6,692
     
  • null

    Year 2

    $366,344 14,805 6,964
     
  • null

    Year 3

    $359,096 14,521 7,248
     
  • null

    Year 4

    $351,553 14,226 7,543
     
  • null

    Year 5

    $343,702 13,919 7,851
     
  • null

    Year 6

    $335,532 13,599 8,170
     
  • null

    Year 7

    $327,029 13,266 8,503
     
  • null

    Year 8

    $318,179 12,919 8,850
     
  • null

    Year 9

    $308,969 12,559 9,210
     
  • null

    Year 10

    $299,383 12,184 9,586
     
  • null

    Year 11

    $289,407 11,793 9,976
     
  • null

    Year 12

    $279,024 11,387 10,383
     
  • null

    Year 13

    $268,218 10,964 10,806
     
  • null

    Year 14

    $256,972 10,523 11,246
     
  • null

    Year 15

    $245,268 10,065 11,704
     
  • null

    Year 16

    $233,087 9,588 12,181
     
  • null

    Year 17

    $220,410 9,092 12,677
     
  • null

    Year 18

    $207,216 8,576 13,194
     
  • null

    Year 19

    $193,485 8,038 13,731
     
  • null

    Year 20

    $179,194 7,479 14,291
     
  • null

    Year 21

    $164,321 6,896 14,873
     
  • null

    Year 22

    $148,842 6,290 15,479
     
  • null

    Year 23

    $132,732 5,660 16,110
     
  • null

    Year 24

    $115,966 5,003 16,766
     
  • null

    Year 25

    $98,517 4,320 17,449
     
  • null

    Year 26

    $80,357 3,609 18,160
     
  • null

    Year 27

    $61,457 2,869 18,900
     
  • null

    Year 28

    $41,787 2,099 19,670
     
  • null

    Year 29

    $21,316 1,298 20,471
     
  • null

    Year 30

    $0 454 21,316
     

Accelerated Fixed Rate Mortgage Amortization Schedule

  • Principal
  • Interest
  • Mortgage Balance
Annual Principal and Interest Mortgage Expense Year End Mortgage Balance
  • $22,000 $400,000
  • $18,000
  • $14,000$300,000
  • $12,000
  • $10,000$200,000
  • $6.000
  • $2,000$100,000
  •  
  • null

    Year 1

    $370,864 15,033 9,136
     
  • null

    Year 2

    $361,356 14,661 9,508
     
  • null

    Year 3

    $351,460 14,274 9,896
     
  • null

    Year 4

    $341,161 13,870 10,299
     
  • null

    Year 5

    $330,443 13,451 10,718
     
  • null

    Year 6

    $319,288 13,014 11,155
     
  • null

    Year 7

    $307,678 12,560 11,610
     
  • null

    Year 8

    $295,595 12,087 12,083
     
  • null

    Year 9

    $283,020 11,594 12,575
     
  • null

    Year 10

    $269,933 11,082 13,087
     
  • null

    Year 11

    $256,313 10,549 13,620
     
  • null

    Year 12

    $242,138 9,994 14,175
     
  • null

    Year 13

    $227,385 9,416 14,753
     
  • null

    Year 14

    $212,031 8,815 15,354
     
  • null

    Year 15

    $196,051 8,190 15,980
     
  • null

    Year 16

    $179,420 7,539 16,631
     
  • null

    Year 17

    $162,112 6,861 17,308
     
  • null

    Year 18

    $144,099 6,156 18,013
     
  • null

    Year 19

    $125,352 5,422 18,747
     
  • null

    Year 20

    $105,841 4,658 19,511
     
  • null

    Year 21

    $85,535 3,863 20,306
     
  • null

    Year 22

    $64,402 3,036 21,133
     
  • null

    Year 23

    $42,408 2,175 21,994
     
  • null

    Year 24

    $19,517 1,279 22,891
     
  • null

    Year 25

    $0 343 19,517
     
  • Year 26

  • Year 27

  • Year 28

  • Year 29

  • Year 30

About the author

Michael Jensen, Mortgage and Finance Guru

Michael is the co-founder of FREEandCLEAR. Michael possesses extensive knowledge about mortgages and finance and has been writing about mortgages for nearly a decade. His work has been featured in leading national and industry publications. More about Michael

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