- I bought a home worth 200,000 paid 20% down, my interest rate is 4%, 30 yr fixed
- Remaining Loan 160,000.
- Initially, lets say I pay around 1000 USD (200 toward my principal and 800 towards my interest).(May not be accurate numbers)
- Now the balance left on my mortgage is 159,000.
If I pay additional 1000 USD towards my principal after paying my balance due this month, Starting next month when I have make my mortgage payment, would I be paying interest on 159,000 or 158,000.
I realized through internet that the additional payments would only cut the down the 30yr term. That is, instead of paying for 30 years, I might be paying for 29 years 11 months. But there would no change in the interest calculation.
Is that true? Appreciate your thoughts in advance.