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Mortgage Acceleration Example
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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.

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
Accelerated Fixed Rate Mortgage Amortization Schedule
PrincipalInterestMortgage Balance
  • $370,864Year 1

    15,033

    9,136
  • $361,356Year 2

    14,661

    9,508
  • $351,460Year 3

    14,274

    9,896
  • $341,161Year 4

    13,870

    10,299
  • $330,443Year 5

    13,451

    10,718
  • $319,288Year 6

    13,014

    11,115
  • $307,678Year 7

    12,560

    11,610
  • $295,595Year 8

    12,087

    12,083
  • $283,020Year 9

    11,594

    12,575
  • $269,993Year 10

    11,082

    13,087
  • $256,313Year 11

    10,549

    13,620
  • $242,138Year 12

    9,994

    14,175
  • $227,385Year 13

    9,416

    14,753
  • $212,031Year 14

    8,815

    15,354
  • $196,051Year 15

    8,190

    15,980
  • $179,420Year 16

    7,539

    16,631
  • $162,112Year 17

    6,861

    17,308
  • $144,099Year 18

    6,156

    18,013
  • $125,352Year 19

    5,422

    18,747
  • $105,841Year 20

    4,658

    19,511
  • $85,535Year 21

    3,863

    20,306
  • $64,402Year 22

    3,036

    21,133
  • $42,408Year 23

    2,175

    21,994
  • $19,517Year 24

    1,279

    22,891
  • $0Year 25

    343

    19,517
  • Year 26
  • Year 27
  • Year 28
  • Year 29
  • Year 30
%
Current Refinance Mortgage Rates in Ashburn, Virginia as of May 13, 2021
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%

Data provided by Brown Bag Marketing, Inc. Payments do not include amounts for taxes and insurance premiums. Read through our lender table disclaimer for more on rates and product details.
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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