This Trick Saves You Over $100K

25 Oct 2022

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YouTube video (financial advice) demonstrating a mortgage-payment trick: by rounding a monthly principal+interest payment on a $400,000 loan at 6% from about $2,398 to $2,700 (an extra $302/month), the speaker claims the loan is paid off 7 years 5 months sooner and that this saves over $130,000 in interest. The clip frames this as a simple, high-impact personal finance tactic.

Questions this video answers

$400,000

6% interest rate

About $2,398 per month

$2,700 per month

$302 per month

Okay. This trick will shave seven years off of your mortgage term, plus save you over $100,000 in interest. You got to check this out. So let's just say you have a $400,000 loan at a 6% interest rate. Your principal and interest payment is 23.98amonth. Now, if you round this payment up to $2,700, that means you're going to pay an extra 302 towards principal each month. Now, that sounds small, but wait till you see these results. This strategy pays off your loan seven years and five months sooner, and it saves you over $130,000 in interest.