Help in computing

[Randomsaver]

. . . the savings if I pay $500 additional principal monthly on a 15-year $200K loan at 3% (assume no escrow for simplification).

I get confused on this.

Here's my intial input . . . my computation shows that my total monthly payment without the additional is ~$1,381.
My second input is my computation shows that if I add $500 per month starting month1, i would be completing the payment in ~124 months as opposed to 180 months (15-year).

If you are getting the similar figures, how do i compute the savings then?

[sblatner]

I have an amortization schedule.

If you have a loan of $200,000 at 3% for 15 years, your payments are $1381 per month. You pay $48,609 in interest.

If you have a loan of $200,000 at 3% for 15 years and you make payments of $1881 per month, you pay around $44,392 in interest and pay it off in just under 11 years.

[Randomsaver]

Thanks sblatner, we have about the same figures except that in my schedule with the additional $500, I put all of it in principal only instead of pro rating it with the interest and principal. This decreased it to ~$32,780 in interest payment (vs your ~$44,390).

Does that make sense?

[Randomsaver]

Here's my thoughts and inquries.

Assuming my total interest payment without the +$500 for 15 years is (a) $48,610; and with the +$500 for ~10.33 years is (b) $32,780. If so my savings will be $15,820.

(a) $48,610
(b) -$32,780
--------
$15,830


Is that the correct methodology to compute for the comparatives (a) and (b)? Should I have computed the interest payment for (a) only up to the years in (b), which would be 10.33 years of ~43,360.

Hence,

(a) $43,360
-(b) $32,780
-------------
$10,580


Or is it even a different computation altogether?