If you currently have a $200,000 mortgage loan and you have secured an interest rate at 6.5 percent, your monthly payment is likely to be $1264 dollars per month if your loan term is 30 years.  This is a considerable payment and you may not realize that the real facts of what you will be paying on the home you are purchasing.  It will cost you far more than $200,000.

Original mortgage amount:  $200,000
Interest rate:  6.5 percent
Term:  30 years
Monthly payment:  $1264
Total interest paid on your loan:  $255,088.98
How much you will really pay in full at the end of your term:  $455,088.98

What will likely be a shock to you is just how much you can save if in fact you add that additional payment to your loan.  If you add just another payment per year of $1264 as in the example above, you could save yourself quite a bit of money. You could do that by paying half your mortgage bill every two weeks instead of the full thing once a month. Here’s how this breaks down for you.

Original mortgage amount:  $200,000
Interest rate:  6.5 percent
Term:  30 years
Monthly payment:  $1264
Additional payment per year of: $1264
Total interest paid: $199,098.92
Total cost of your loan when paid in full:  $399,098.92
Pay off date of the loan is reduced by:  6 years!

In this example, you see that you have not just cut into the amount of interest that you are saving by an outstanding savings of nearly $56,000 but you also have cut out the time that you will be repaying your loan down to just 24 years instead of the full 30 years.  That savings can be figured out for your specific loan by using a mortgage calculator.  You simply need to calculate what an additional payment per year will do to your loan.

(edited from source)