Mortgage Payoff Calculator

What will it take for you to pay off your mortgage? This Mortgage Payoff Calculator helps you find out.

Paying Off your mortgage early will literally save you thousands upon thousands of dollars in interest payments over the life of your loan. It always amazes me how a few extra dollars a month in payments can drastically reduce how much interest you pay over the life of your loan.

Some ways to payoff your mortgage early are to use a Bi-weekly payment plan. To find out more about this see our Bi-Weekly Mortgage  article.

This calculator will help you decide when it is best to reduce the length of your loan. You may also find the following article helpful-- When Mortgage Rates are low do you Reduce your Payment or reduce the length of the Loan?

Another helpful article is When is it Right to Refinance?

All-in-all reducing your interest payments by paying off your mortgage early can be one of the best investments you make in your future. Early payoff has a guaranteed rate of return that is much higher than any CD or savings account you can have. If your mortgage is costing you 6.5% then your effective rate of return by paying off this mortgage early is 6.5% and it is Guaranteed! In other words you would have to be able to guarantee that you were able to make more than 6.5% in order for it to be a better investment than the mortgage payoff.

If you put money in a CD for the long term at 3% you are actually losing 3.5% compared to paying off your 6.5% mortgage early. Of course if you are going to need the money in a year or two you might have to put it in the CD rather than payoff the mortgage.   But what about a long-term stock market investment? Should you pay off your 6.5% mortgage or invest in the stock market? Historically the stock market has had a possible long term return of about 10%?  Unfortunately, there are also risks depending on which investments you choose. If you are risk averse it would probably be better for your peace of mind to pay-off your mortgage early rather than invest in the market.

If on the other hand you are an experienced investor with a good track record of getting a 10% rate of return then it would be better to invest in the market than to pay-off your mortgage. Averaging 10% per year would give you a 3.5% advantage over paying off a 6.5% mortgage. But by using this early mortgage pay-off calculator you can see your total saving resulting from paying off early. Plus you see in easily visualized terms a graph of how fast your principal balance drops and you can make changes to your assumptions and quickly see how it changes what you pay and how much you save.

Mortgage Payoff

How much interest can you save by increasing your mortgage payment? This financial calculator helps you find out. Click the 'View Report' button to see a complete amortization payment schedule and how much you can save on your mortgage.

Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide investment advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.

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