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How do I pay off my mortgage early?One way to pay off your mortgage early is by adding an extra amount to your monthly payments. But how much more should you pay? NerdWallet's early mortgage payoff calculator figures it out for you. Fill in the blanks with information about your home loan, then enter how many more years you want to pay it. The calculator not only tells you how much more to pay monthly to pay down your principal faster; it also shows how much you'll save in interest. What the early mortgage payoff calculator doesDo you want to pay off your mortgage early? Maybe you have 27 years remaining on your home loan but you would rather pay it off in 18 years instead. The early payoff calculator demonstrates how to reach your goal. The mortgage payoff calculator shows you:
There are many reasons you might want to accelerate the mortgage's payoff, but the motivation usually boils down to either or both of these:
To steadily pay off the mortgage early, you need to know how much more to pay toward the principal balance every month to accomplish that goal. This calculator lets you do that. When paying down the principal on a mortgage faster, keep in mind that each servicer has its own procedures for assuring that your extra payments go toward the principal balance instead of toward future payments. Contact your servicer for instructions. How to use the early mortgage payoff calculatorTo fill in the calculator's boxes accurately, consult a recent monthly statement or the first page of the Closing Disclosure that you received when you closed on your mortgage.
What the mortgage payoff calculator tells youThe Summary Results section has two subheadings:
"New monthly P&I" and "Original monthly P&I" comprise only the principal and interest portions of your monthly payments. Your full monthly payment will include principal and interest, plus the other monthly costs, such as taxes, homeowners insurance and mortgage insurance (if applicable). The early mortgage payoff calculator also lets you enter different numbers into the "In how many years from now do you want to payoff your mortgage?" box to see how those changes affect your total savings. Other ways to pay off a mortgage earlyPaying off a mortgage early requires you to make extra payments. But there's more than one way to pay off the mortgage early:
Save thousands on your loan by comparing competitive refi quotes Get personalized quotes from our marketplace of lenders and negotiate your best rate. Answer a few questions to get started. ZIP code Is it better to pay lump sum off mortgage or extra monthly?Making a lump-sum payment always saves you money on interest. And depending on how you handle it, the payment will either shorten the time it takes to pay off your mortgage or reduce your monthly payment amount.
How much faster will I pay off my mortgage with one extra payment a year?The truth is, if you can scrape together the equivalent of one extra payment to put toward your mortgage each year, you'll take — on average — four to six years off your loan. You'll also save tens of thousands of dollars in interest payments.
Will my monthly payments go down if I pay a lump sum?“No, making a lump-sum payment later won't change your monthly pay rate. What it will do is lower the principal you owe and effectively shorten the length of your loan, saving you money in the process.
How many years does 2 extra mortgage payments take off?The additional amount will reduce the principal on your mortgage, as well as the total amount of interest you will pay, and the number of payments. The extra payments will allow you to pay off your remaining loan balance 3 years earlier.
Is it smart to pay extra principal on mortgage?A little goes a long way
Making your normal monthly payments will pay down, or amortize, your loan. However, if it fits within your budget, paying extra toward your principal can be a great way to lessen the time it takes to repay your fixed-rate loan and the amount of interest you'll pay.
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