Reduce Your Monthly
Mortgage Payments By Increasing Your Down Payment
The
size of your mortgage payment is determined by two factors  the interest
rate and how much you borrow. There is little you can do to reduce interest
rate. However, you can reduce your mortgage payment by having a larger
down payment. Using an automatic savings plan is the easiest way to
build your down payment.
Here
is a chart showing the affect of having a larger down payment for a
home costing $250,000 (assumes an interest rate of 3.5% and a 30 year
amortization).
Cost
of the home

Down
payment

Mortgage
Amount

Monthly
payment

$250,000

$25,000

$225,000

$1,010

$250,000

$50,000

$200,000

$898

$250,000

$65,000

$185,000

$831

$250,000

$75,000

$175,000

$786

$250,000

$100,000

$150,000

$674

Here
is a calculator you can use to determine monthly payments for different
size loans and different interest rates.
Start
Your Automatic Savings Today
There is no easier way to save than with an automatic savings plan.
If you are already using direct deposit for your paycheck, have your
financial institution transfer the amount each month. You can also have
your employer deduct the amount each month and deposit into the account
of your choice with a payroll deduction program. Ask your employer for
the form to start now.