Mortgage Acceleration Example

Michael Jensen, Mortgage and Finance Guru

Updated November 11, 2020

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.

Learn How Mortgage Acceleration Works

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.

OurMORTGAGE ACCELERATION CALCULATORcalculates the savings from overpaying your loan

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

Fixed Rate Mortgage Amortization Schedule

PrincipalInterestMortgage Balance

$373,308Year 1
15,078
6,692
$366,344Year 2
14,805
6,964
$359,096Year 3
14,521
7,248
$351,553Year 4
14,226
7,543
$343,702Year 5
13,919
7,851
$335,532Year 6
13,599
8,170
$327,029Year 7
13,266
8,503
$318,179Year 8
12,919
8,850
$308,969Year 9
12,559
9,210
$299,383Year 10
12,184
9,586
$289,407Year 11
11,793
9,976
$279,024Year 12
11,387
10,383
$268,218Year 13
10,964
10,806
$256,972Year 14
10,523
11,246
$245,268Year 15
10,065
11,704
$233,087Year 16
9,588
12,181
$220,410Year 17
9,092
12,677
$207,216Year 18
8,576
13,194
$193,485Year 19
8,038
13,731
$179,194Year 20
7,479
14,291
$164,321Year 21
6,896
14,873
$148,842Year 22
6,290
15,479
$132,732Year 23
5,660
16,110
$115,966Year 24
5,003
16,766
$98,517Year 25
4,320
17,449
$80,357Year 26
3,609
18,160
$61,457Year 27
2,869
18,900
$41,787Year 28
2,099
19,670
$21,316Year 29
1,298
20,471
$0Year 30
454
21,316

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

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Mortgage Acceleration Example