Paying off the loan quicker than over the original term

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A homeowner obtains a $500,000.00 loan at an interest rate of 6-1/8% based on a 30 year amortization schedule. What is the monthly payment? What is the total amount of interest that would be paid over the life of the loan? Assume that after the 48th payment, the homeowner pays an additional $200.00 per month. At what month would the loan be paid in full? How many years sooner would the loan be paid off, versus just making regular monthly payments? How much interest would the homeowner save paying off the loan quicker than over the original term?

Reference no: EM131972749

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