Prepaying on your home mortgage can be a great way to save thousands of dollars in interest on your mortgage. You might have heard of companies that will set up a program for you to follow in order to prepay your mortgage. There are other companies that will charge you each month to debit your account to help prepay. This is all nonsense. They try to make it seem complicated so you give up and pay them to do it for you. The concept is very easy and you can do it yourself using a mortgage amortization schedule.

For those of you reading who aren’t familiar with the benefits of prepaying  mortgages, take a look at the following example. Let’s say you have a $300,000 6% 30 year fixed rate mortgage. Your monthly payment would be about $1,800 a month. The total amount of interest you would pay on that mortgage would be over $347,000! Now let’s see how we can lower that interest cost.

By adding as little as $100 a month to your mortgage each and every month, you would pay $294,000 in interest, a saving of over $53,000. If you added $300 a month, the total interest would be $227,000. This would be a savings of over $120,000 if you didn’t prepay. Clearly prepaying your mortgage can save you a large amount of money.

This where using an amortization schedule comes into play. By using an amortization schedule, you will be able to track your savings. You can choose to prepay the same amount each month, or you can vary the monthly payment if you want. That’s the beauty of prepaying a mortgage; you can start and stop anytime you want.

There are many places on the web where you can find amortization schedules. You can either use online tools to follow you savings or download an amortization schedule for excel so you can create your own custom schedules.

If you want a simple way to save money on your mortgage, take a look at mortgage prepayment.