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How To Pay Off My Mortgage Faster Calculator

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Department Of Veterans Affairs Loan

HELOC Calculator: How To Get To Your PayOff Date

VA loans are a great idea in theory! They were designed to make it easier for our countrys military veterans to purchase homes, but the program falls short in practice. VA loans are backed by the Department of Veterans Affairs and allow veterans to purchase a home with practically no down payment.

When you buy a home with nothing down, a slight shift in the market could mean you owe more than the market value of your home. Thats a recipe for disaster because it could leave you stuck in a home until the market recovers. VA loans also have lot of fees, and interest rates are usually higher than those for conventional loans.

Refinance With A Shorter

Refinancing a mortgage refers to getting a new loan to replace your current mortgage. The new loan can help cut monthly costs or pay off the loan quicker with a new loan term. A shorter term on the mortgage means it goes away sooner but at the cost of a much higher monthly payment and perhaps some out-of-pocket closing costs. Ask yourself: Can you afford the higher monthly payment of a 15-year loan? Or, are you better off contributing extra each month to a 30-year payment?

Benefits Of Paying Off Your Mortgage Early

Owning a home without a mortgage is financially liberating. Here are just a few of the key benefits:

  • You save money. By paying off your mortgage you eliminate interest costs. This lowers your monthly expenses and reduces the total cost to own your home.
  • No interest is better than a mortgage tax deduction. If you keep the mortgage to get the tax deduction then you’re paying $1 to the bank to get a $0.25 tax deduction . You’re still out $0.75. If you pay off the mortgage, you pay $0.25 in taxes and have $0.75 in your pocket.
  • You will gain the flexibility of using what had been the mortgage payment to invest in retirement or save toward other financial goals. Imagine! Not only will you avoid paying mortgage interest, but you’ll be making money in higher-yielding accounts!

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Should I Pay Off My Mortgage Early

Early Payoff Mortgage Calculator to Calculate Goal Payment Amount ...

The decision to pay off your mortgage early is a personal one. Doing so is probably the right move if you want to prioritize eliminating debt, reducing the amount of interest you pay or freeing up space in your monthly budget.

However, deciding to wait might be a better choice for you if you have concerns about your monthly cash flow now or in the futuresay because the economy is shaky or youre hoping to retire soon.

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How To Calculate Extra Mortgage Payments

Using our Mortgage Payment Calculator, you can crunch the numbers and discover how much you could save in interest, or how much you would need to pay each month to pay your loan off sooner.

For example, according to the calculator, if you have a 30-year loan amount of $300,000 at a 4.125% interest rate, with a standard payment of $1,454, if you increase your monthly payment to $1,609, you could pay your loan off five years and one month earlier while saving $43,174 during the loan’s lifetime.

How To Pay Off A 30

There are a few ways to pay off a mortgage sooner than the 30-year term.

Options to pay off your mortgage faster include:

  • Pay extra each month
  • Pay off other debts

There are advantages to each approach. The choice comes down to careful study and a decision based on your financial position and ability to repay what will be higher monthly payments.

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Want To Make Irregular Payments Do You Need More Advanced Calculation Options

  • Biweekly Payment Method: Please see our bi-weekly mortgage calculator if you are using biweekly payments to make an effective 13th monthly payment.
  • Extra Payments In The Middle of The Loan Term: If you start making extra payments in the middle of your loan then enter the current loan balance when you started making extra payments and set the loan term for however long you have left in the loan. For example, if you are 3.5 years into a 30-year home loan, you would set the loan term to 26.5 years and you would set the loan balance to whatever amount is shown on your statement. If you do not have a statement to see the current balance you can calculate the current balance so long as you know when the loan began, how much the loan was for & your rate of interest.
  • Irregular Extra Payments: If you want to make irregular extra contributions or contributions which have a different periodicity than your regular payments try our advanced additional mortgage payments calculator which allows you to make multiple concurrent extra payments with varying frequencies along with other lump sum extra payments.

For your convenience current Los Angeles mortgage rates are published underneath the calculator to help you make accurate calculations reflecting current market conditions.

Calculate A Mortgage Payoff To Understand Your Mortgage Payment

Do This To Pay Off Your Mortgage Faster & Pay Less Interest

A surprising number of people do not fully understand their mortgage payment. You may assume that you are reducing the principal debt amount but your payments could only be covering interest, to begin with. If you do not understand your mortgage payment, you cant pay it off in the most economical way. If you calculate mortgage payoff you can understand exactly how much of your payment is interest and how much goes towards the principal amount. Keep in mind that your payment may include other costs like mortgage insurance, for example.

When you are looking to buy a home and you are comparing mortgage quotes, consider your payoff amount. It is important that you have an idea of your monthly payments and how long you need to pay it for. This allows you to make an informed decision and plan your finances accordingly. Understanding your mortgage payment helps you avoid financial issues in the future.

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Calculating Your New Payoff Date

Using the above calculator can help you get a clear picture of how much more quickly you can pay off your loan based on how much extra you plan to pay each month. The above calculator is also useful if you are trying to figure out how much extra you would need to pay if you want to have your house paid off by a certain date to meet financial goals, such as being able to retire early.

To use the calculator, just put in the amount of the original loan, the interest rate, the length of the loan, and the monthly payment that you propose. The results will be e-mailed directly to you within moments with a plain-English analysis. If you are trying to figure out how much you need to pay to meet a pay-off goal, you will just need to keep experimenting with the monthly payment until you get the results you want.

Of course, the calculator can only give you an estimate to help guide your financial planning. You will need to talk directly with a loan counselor to understand how your payments impact your particular loan. For example, you loan may include a penalty for early re-payment. By talking to a loan counselor, you can understand all the circumstances that may affect your loan so that you can make the best decision to meet your financial goals.

Early Mortgage Payoff Examples

Imagine a $500,000 mortgage with a 30-year fixed interest rate of 5%. If you paid an extra $500 per month, youd save around $153,000 over the full loan term and it would result in a full payoff after about 21 years and three months.

If you had a $400,000 loan amount set at 4% on a 30-year fixed, paying an extra $100 per month would save you nearly $30,000 and youd pay off your loan two years and eight months early.

If you had a $300,000 loan amount set at 4.5% on a 30-year fixed, paying an extra $250 per month would save you almost $70,000 and youd pay off your loan seven years and six months ahead of schedule.

Or consider a $600,000 loan amount set at 6% for 30 years. Paying an extra $1,000 per month would save a homeowner a staggering $320,000 in interest and nearly cut the mortgage term in half. To be more precise, itd shave nearly 12 and a half years off the loan term.

The result is a home that is free and clear much faster, and tremendous savings that can rarely be beat.

The list goes on and the savings may shock you. While most people tend to be alarmed by the amount of interest they pay the bank over 30 years, its equally shocking how much you can save simply by paying a little extra.

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What Is Mortgage Amortization

Mortgage amortization is a financial term that refers to the process of paying off your mortgage in monthly installments according to an amortization schedule. Your mortgage amortization schedule will show how your monthly payments will be split between principal and interest and how this will shift over time as you pay off more of your loan.

In general, most of your payments will go toward paying off the interest compared to the principal on the front end of the loan period. In other words, interest is front-loaded at the beginning of the loan period. However, this will reverse over time, and youâll eventually pay more toward the principal and less toward interest over the course of the loan.

How To Calculate A Mortgage Payoff Amount

What Is an Amortization Schedule? Use This Chart to Pay Off Your ...

You can calculate a mortgage payoff amount using a formula Work out the daily interest rate by multiplying the loan balance by the interest rate, then multiplying that by 365. This figure, multiplied by the days until payoff, plus the loan balance, gives you your mortgage payoff amount.

Your mortgage originator can make these calculations for you if you contact them. This is an easier option because the figures can be quite confusing. They will send you written confirmation of your mortgage payoff amount. You can also use mortgage payment calculators online. They can tell you the payoff amount on the entire loan or the current balance.

Calculating your mortgage payoff amount helps you understand exactly what you are paying. Once you know how much you will pay in total, it is much easier to plan your finances in the future. Ultimately, it will help you save money on interest over the course of your mortgage.

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Calculate A Mortgage Payoff To Determine How Long It Will Take To Pay It Off

Future financial planning is easier if you know when your mortgage will be paid off. If you calculate the mortgage payoff amount, you can then determine how long it will take you to be mortgage-free. You can also calculate different scenarios for paying off your mortgage to see if you can save money. For example, knowing your mortgage payoff amount will help you decide if refinancing is a good option or not.

Faq About Early Mortgage Repayment

  • What are the drawbacks of paying off my mortgage early?

    If you pay off your mortgage early, you might lose access to liquid cash you could put toward other financial goals, or miss out on investments with a higher rate of return compared to a mortgage. Youll also tie up a large chunk of your net wealth in your home, which means youll either need to sell the home or tap your equity to obtain it.

  • Is it a good idea to make lump-sum payments on my mortgage?

    Lump-sum payments can help you pay off your mortgage faster and enjoy the peace of mind that comes with owning your home free and clear. However, this might not be the best idea if you plan to move soon.

  • What happens when I pay off my mortgage?

    When you pay off your mortgage, your lender will send you a canceled promissory note to indicate that you fulfilled your obligation to pay off the loan. You might also receive a certificate of satisfaction confirming you no longer owe on your home. Many lenders notify the city or county recorder that you are now the sole title holder of the residence, although you might be responsible for communicating with the recorders office to remove the lien from your home.

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How Calculating Amortization Helps You

Calculating your mortgage amortization can help you figure out how several important details about your loan, including:

  • How much youâll pay toward principal and interest each month
  • How much youâve paid in total so far each monthâand how much you still owe
  • What your total interest and repayment costs will be
  • How making extra payments can save you money on interest or shorten your repayment time

You can also use the mortgage amortization calculator to estimate information like how much youâd need to pay extra to pay off your loan by a certain time or how much home equity youâve built.

Make An Extra Mortgage Payment Every Year

How to Pay off Your Mortgage Faster (The Truth)

Throw all or a portion of new-found money like a year-end bonus or inheritance at the mortgage. The earlier into the loan you do this, the more of an impact it will have. In a typical 30-year mortgage, about half the total interest you pay will accumulate in the first 10 years of your loan. That is because your interest rate is calculated against the very high principal amount you owe in the early years.

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Is There A Penalty For Paying Off My Mortgage Early

You may have to pay a prepayment penalty if you pay off your mortgage within the first few years of the life of the loan. That amount can be heftyoften as much as 2% of the mortgage amountenough to impact your calculations about early payoffs. The good news is that you can avoid the prepayment penalty by waiting until it no longer applies or, in some cases, talking directly with your lender about it.

Get Forbes Advisors ratings of the best mortgage lenders, advice on where to find the lowest mortgage or refinance rates, and other tips for buying and selling real estate.

Why You Should Get Pre

oobas pre-approval allows you to check your credit score and assess how much you can afford.

  • Shop with confidence

    Knowing your credit score allows you to address any issues before applying for a home loan.

  • Know how much you can afford

    ooba considers your financial information in the same way a bank would, to give you an accurate assessment of what you can afford.

  • Get the competitive advantage

    Sellers are more likely to accept an offer from someone who has proof that they can afford to buy.

  • Sign a sale agreement with peace of mind

    Pre-approval protects you from putting in an offer on a property you cant afford. Why risk disappointment?

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More Ways To Pay Off Your Mortgage Early

Here are a few more creative strategies for paying off your mortgage early:

  • Refinance to a shorter term. If you refinance into a mortgage that needs to be paid over a shorter period of time, youll pay it off sooner. Youll pay more each month, but less interest over the life of the loan.
  • Make extra principal payments. You can make an extra principal payment every month, once a year or whenever youre able. Doing so will reduce the amount you owe and the interest on it. If youre paying private mortgage insurance, it could help eliminate that liability, as well.
  • Make bi-weekly payments. If your lender is agreeable, switch from paying your mortgage monthly to paying bi-weekly. This equates to one extra payment per year.
  • Recast your mortgage. A mortgage recast involves applying a lump sum toward your principal and having the bank adjust your payoff schedule at a lower fee than refinancing.

Find A Lower Interest Rate

Bookmark This List Of Real Estate Calculators

Work out what features of your current loan you want to keep, and compare the interest rates on similar loans. If you find a better rate elsewhere, ask your current lender to match it or offer you a cheaper alternative.

Comparison websites can be useful, but they are businesses and may make money through promoted links. They may not cover all your options. See what to keep in mind when using comparison websites.

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How Much Extra Should You Pay To Payoff Your Mortgage Early

You dream of paying off your mortgage early.

You long for the day when you are debt free.

But how do you do it?

How much must you pay each month to be out of debt by a certain date?

What if you wanted to pay off your mortgage in 15 years instead of 30? How much would you save?

The good news is this mortgage payoff calculator makes figuring out your required extra payment easy.

You choose how quickly you’d like to pay off your mortgage, and the calculator will tell you the required extra monthly payment to get it done. It will also tell you how much interest you’ll save!

However, before you start making your extra payments, there are a few factors you’ll want to consider first . . . .

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