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Calculate Months to payoff Mortgage

well today I'm answering a question for

one of my subscribers how do I pay off

my mortgage in 15 years now this is a

really great question because I don't

have an app built for that and I don't

have a spreadsheet so I decided that I

would make one and as always I haven't

done my intro I guess I should probably

do that I'm not a financial adviser I

don't work in the finance industry and

my name is Levi woods I this is an

opinion channel about money and the

reason that I have the channel is to

help people like you make more money and

to build more wealth how do you guys

know I love to build charts and we're

gonna do this again for the second time

because somehow I wasn't recording my

screen the first time around so today we

are going to look at percentages I built

this little chart ish to show

percentages to show the amount increase

of extra payments basically the reason I

built this is because I wanted to show

how difficult it is to pay off a low

rate mortgage now I have subscribers

from all over the world

I have subscribers in Australia Canada

United States and every country has

different mortgage payments different

mortgage structures what ends up

happening is I I need to create charts

that work for everybody I need to create

spreadsheets that you can input your own

data and that's exactly what I've done

but before I get into the actual chart I

just want to show you how the interest

rates function and how it makes it very

difficult to pay off a mortgage in half

the time

if the interest is low let's take a look

at this the original mortgage value this

is where we calculating right now

$400,000 the original term three hundred

and sixty months which is 30 years now

if somebody wanted to pay off that

mortgage in 15 years or 180 months just

did a quick calculation here if their

mortgage was only 2% now I know from

Americans this is like unrealistic but

for Canadians this is totally realistic

to have low low mortgages normally

monthly payment would be 1478 the extra

payment would be one thousand ninety

three dollars the extra monthly payment

would have to be seventy four percent of

the normal monthly payment that's an

extremely large amount of money now in

contrast if you scroll down just to 6%

if we look at that the normal monthly

payment is

bigger 2400 but the extra amount of

money to pay it off in half the time is

only 972 dollars that's an increase of

only 40 percent now of course you're

thinking well yeah but this they're

automatically paying a lot more well the

thing is in countries that have low

mortgage rates the housing is very very

expensive let's look at this example in

the United States I get lots of

subscribers that say I have a mortgage

for $200,000 so on a 6% mortgage the

normal monthly payment is is eleven

hundred and ninety nine dollars so

twelve hundred bucks a month that's the

normal make mortgage payment to pay it

off in half the time

a total of for another 486 you're

looking at a total payment of around

seventeen hundred a month in Canada the

hoses are just way more money so if

you're moving into a similar house you

could be looking at like a four hundred

thousand dollar loan so all of a sudden

a four hundred thousand dollar loan at a

three percent interest is the the base

payment is seventeen hundred that's what

the Americans were paying with their

extra payment and the extra monthly

payment here in Canada so now it would

have to be a thousand dollars so what

we're looking at is a payment of over

twenty seven hundred dollars a month

just to pay it off in half the time it's

because this payment is increased by

sixty three percent now if you scroll

down to the bottom I went really far

because interest rates in Canada in the

early 80s when I was young were eighteen

percent my parents were paying an 18

percent mortgage at that time the values

of the homes were way less and maybe I

was like a fifty thousand dollar

mortgage and so the normal monthly

payment was seven hundred and fifty

three dollars they only needed to make

an extra payment of $50 to pay it off in

half the time or six point seven percent

so it's an absolute no-brainer if you

have a high high percentage mortgage and

high being anything above six percent in

my mind make these my extra payments

because it pays it down amazingly

quickly like with very very little money

on a fifty thousand dollar mortgage they

look you you're paying your normal

payments three hundred dollars and you

only have to pay another hundred and

twenty bucks that's pocket change for

most people they can just make that

extra payment so what we're gonna do is

we're gonna look at this the mortgage

free goal calcula

which I created so this doesn't use the

original amount this uses an arbitrary

amount whatever we owed a so we could

look that up online you log on to your

online banking and you enter this data

so let's say I have an outstanding

balance at two hundred and thirty nine

thousand three hundred and forty five

dollars annual interest rate is four

point five percent and the current

regular payment now if this doesn't show

you on your online banking what your

regular payment is which it should but

if it doesn't and you need a little help

I've also included a little calculator

here which calculates a normal monthly

payment let's just say we're we're

looking at $239,000 loan let's say the

original value of this loan was 250,000

and the original term was three hundred

and sixty months four point five percent

then the normal monthly payment would be

twelve 6671 so that's that number we're

gonna take from this twelve 6671 I'm

going to put that in 1266 seventy one

hit enter it tells me right now that

current payoff in months is three

hundred and twenty nine dollars and the

current expected interest I'm gonna pay

is a hundred and seventy seven thousand

dollars if my goal is to pay it off

fifteen years from today then that's

when I'm gonna enter I'm gonna put my

goal in here I'm gonna months to pay off

I want to pay off in a hundred and

eighty months hit enter and it's gonna

say that over and above the 1266 that

I'm normally paying I'm gonna have to

pay an additional five hundred and sixty

four dollars but because I'm paying that

extra my new interest cost is only gonna

be ninety thousand all of it interest

savings of eighty seven thousand dollars

which is pretty amazing

now I know I was building this and I

thought okay that's great but what if we

want to figure out how long or how much

we're gonna save timewise if we just put

in an arbitrary extra amount so I did an

extra little thing here so you can

calculate a different way what if we

just calculated an additional monthly

payment say we did a hundred dollars if

we put that in a hundred dollars then

instead of paying off the mortgage in

three hundred and twenty nine months we

would pay off the mortgage in two

hundred eighty six months we'd have new

interest cost of a hundred and fifty one

thousand with interest savings of twenty

six thousand so this gives you two

different calculations in the same chart

which is pretty amazing and you can just

play with your own numbers you can put

in a five point six point five percent

mortgage and it will give you errors if

the information isn't right your regular

payment can't be too little otherwise it

will error out but this will calculate

out if you had two hundred and thirty

nine thousand remaining and a six point

five percent and your regular monthly

payment is two thousand dollars then

you're gonna pay off in one hundred and

ninety three months already but if you

want to squeeze some of those months off

you have to pay an extra eighty four

bucks

anyways that's it that's how the chart

works super super simple so if you guys

are interested in getting it check out

the description below I'll put a link to

my Etsy store or if you're one of my

patrons you can go to patreon and you

can subscribe to my monthly trades and

you can follow all of the trades that I

do so we can all get rich together and

you can download these spreadsheets from

there as well thanks so much for

watching and let's get rich together

you