The phrase
"interest payments over the life of the loan" refers to the total amount of interest that will be paid on a loan from beginning to end, including any accumulated interest.
Full definition
When the borrower makes a payment, you get your portion of the principal and
interest payment over the life of the loan.
For example, a 1 % change in a thirty - year $ 100,000 mortgage means paying an additional $ 20,000 in
interest payments over the life of a loan.
Shorter loans, such as a 20 year or 15 year note, can save you thousand of dollars in
interest payments over the life of the loan, but your monthly payments will be higher.
And it makes sense — putting even a little extra towards your loans each month can save you a lot of money in
interest payments over the life of the loan.
By paying down the principal, you can save a lot in
interest payments over the life of the loan.
The monthly increase is worth it to us to save over $ 100,000.00 in
interest payments over the life of the loan and pay it off in half the time.
This will impact the amount of your Principal and
Interest payment over the life of the loan.
There are many, but the biggest benefit is that you will (most likely) be paying much less in
interest payments over the life of the loan.
Having a higher rate is not good thing because it costs more in
interest payments over the life of the loan.
And don't forget, any loan payments you can make during this grace period come with the added benefit of reducing your interest before it capitalizes, which could potentially save you thousands in
interest payments over the life of your loan.
Not only will this strategy open up tens of thousands of dollars a year in funds that no longer need to go toward your mortgage payments, it will also save you hundreds of thousands of dollars in
interest payments over the life of the loan.