The total cost of a mortgage will continue to grow over the length of the loan. Over time, interest can add thousands of dollars to what you owe for your home. The quicker you pay off the mortgage, the less time that interest has to accrue, and the less you'll need to pay. This calculator will show how much you can save in time and money by paying more than your monthly requirement.

How It Works

Enter your price of the home as the Home Price and adjust the sliders to match the parameters of your mortgage. To see how much you can save by adding to your monthly payment, adjust the slider for the Added Monthly Amt. You can now compare the difference in payoff dates, total interest paid, and total amount paid for your home between paying the minimum payments and adding a bit more each month.

Strategies for Early Mortgage Payoff

Most people, when they hear “early mortgage payoff,” think it requires doubling the mortgage payments every month—an achievement not everyone can accomplish. But there are other ways to pay off a mortgage early without such hefty upfront costs. In fact, there are many ways to pay off a mortgage quicker. Here’s a list:

1. Bi-Weekly Payments or Make One Extra Payment:

Rather than making one full mortgage payment every month, consider paying half of the full mortgage payment every two weeks. Factoring in the number of payments you’ll make when paying half bi-weekly, you’ll make 26 half-payments per year which adds up to 13 full-payments or one extra payment every year. Set aside money monthly to save up for the extra payment or even use a portion of an annual bonus or tax refund.

2. Extra Principal Payments:

Make additional payments (monthly, quarterly, annually, etc.) where you can go towards the principle of the mortgage or the amount still owed on the loan. Using unexpected financial gains such as tax refunds, bonuses, or inheritances to make additional principal payments on your mortgage could make all the difference in how fast a mortgage loan is paid off in full.

3. Refinancing:

As demonstrated by this mortgage calculator, refinancing a mortgage could help you pay it off quicker. Considering some forms of refinancing could mean paying less—or more—for a base monthly payment each month, it’s important to use a mortgage refinance calculator to calculate what the new payment will be to ensure it fits within your budget. Here are two ways to refinance:

  • Shorter Loan Term: Refinance your mortgage from a longer term (e.g., 30 years) to a shorter term (e.g., 15 or 20 years). Shorter term loans usually come with lower interest rates but higher monthly payments. You pay off the mortgage faster and save on interest. The higher monthly payments are offset by the savings in interest and the quicker debt elimination.
  • Lower Interest Rates: Refinance your mortgage to secure a lower interest rate. Even if you maintain the same loan term, lower interest means more of your payment goes towards the principal. Lower monthly payments or maintaining the same payment amount with more going towards principal, reducing the loan term.

4. Round Up Payments:

An increase in each payment, even small, can make a big difference over time. Round up your mortgage payments to the nearest hundred dollars. For example, let’s say you have a mortgage payment of $2,450, consider rounding up to $2,500. That extra 50 dollars could take a year off your mortgage!

Any number of these options are a great way of ensuring you save money by paying off your mortgage before interest builds up. It’s up to you which early payoff strategy you’d like to use based on your budget and financial situation.

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