Shopping for a loan can be a little overwhelming, so I did what any good nerd would do and made a spreadsheet amortizing several loans and then highlighting the conclusions.
First I compared two loans I found on Bankrate, one at 3% with a little bit of fees and points, the other at 2.88% with more fees and points.
https://i.imgur.com/KU7ftq6.png
So, I think I conclude I’m going to end up paying more up front in points for Loan #2 but it will pay for itself after about 6 years – I think this is called the breakover or breakeven point? Over the life of the loan I could save around $6k?
Well, then I considered a 15 year loan, and looked up it’s best rates on Bankrate:
https://i.imgur.com/xo8m9Ps.png
Well, that certainly is a huge saving in interest, but it is quite the large bump in monthly payment. So then I figure, why not compare that to the original loan terms, but instead just pay an extra $1000 a month to principal, and then if money is needed elsewhere, I can skip an extra payment here or there.
Turns out that’s not as effective as I thought it would be:
https://i.imgur.com/SYJYsoK.png
But it it definitely more favorable to not paying extra at all.
https://i.imgur.com/8bNf2GN.png
Let me know if I got anything wrong!
