# Early Mortgage Payoff Calculator

If you own real estate and are considering making extra mortgage payments, the “early mortgage payoff calculator” below could be helpful in determining how much you’ll need to pay and when to meet a certain financial goal.

Put simply, it’s a standard mortgage calculator with extra payments built-in, so it’s really easy to use. But also very powerful.

You input your original mortgage amount and can quickly see what paying extra will do in terms of both interest savings and shaving years off your mortgage.

## Use the Early Mortgage Payoff Calculator to Determine the Actual Savings

• This calculator will illustrate the potential savings
• Knowing the actual numbers can help you determine if it makes sense
• To make extra payments based on your financial goals

For example, if you’re interested in paying off your mortgage off in 15 years as opposed to 30, you generally need a monthly payment that is 1.5X your typical mortgage payment.

So if you’re currently paying \$1,000 per month in principal and interest payments, you’d have to pay roughly \$1,500 per month to cut your loan term in half. Of course, that’s just a ballpark estimate. It will depend on the mortgage rate and the loan balance.

This early payoff calculator will also show you how much you can save in interest by making larger mortgage payments.

You might be surprised at the potential savings, but be sure to consider where you’d put that money elsewhere. It might earn a better return in the stock market or someplace else.

## How to Use the Early Payoff Mortgage Calculator

• Enter the original loan amount and date you took out the mortgage
• Input the loan term and interest rate
• Select the date of extra payment(s)
• Along with the amount and frequency

To use the early payoff mortgage calculator, simply enter your original loan amount when you first received the loan, along with the date you took out the home loan.

Then enter the loan term, which defaults to 30 years. You may also enter 360 months for a 30-year loan, or 15 years for a 15-year fixed (or 180 months) depending on loan type desired.

Speaking of loan type, you’ll save a lot more money by paying extra on a mortgage with a longer term, such as the 30-year fixed. And if the loan amount is larger.

Next, enter the mortgage rate and the date you plan to make the extra (or larger) payment. Then input the additional payment amount and whether it’ll be a monthly, annual, or one-time extra payment.

For example, if you plan to pay an extra \$100 per month, you shouldn’t have to change anything with the default settings. If you want to make a lump sum extra payment of \$1,000, enter it and change the “Monthly” to “One Time” for an accurate calculation.

Once you click compute, you’ll see how much the extra mortgage payments will save in the way of interest over the life of the loan, and also how much faster you’ll pay off your mortgage.

## 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, you’d 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 you’d 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 you’d 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, it’d 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, it’s equally shocking how much you can save simply by paying a little extra.

## Benefits of an Early Mortgage Payoff

There are two main benefits of paying a mortgage early – less interest paid and more home equity faster.

But paying off the mortgage is not necessarily always the best choice if you have more expensive debt, like outstanding credit card balances. Or if you haven’t yet saved for retirement. You may also want that money to purchase additional real estate, as opposed to it being locked up in your home.

This calculator can at least do the math portion to illustrate the power of paying extra and paying off your mortgage ahead of schedule. You’ll then need to weigh those savings against other options like paying your credit cards or ensuring you’ve saved for retirement.

In other words, make sure you’re actually saving money by allocating a larger amount of money toward paying off the mortgage as opposed to putting it elsewhere.

If you want to see the payment schedule, which details every monthly payment based on your inputs, simply tick the box. This will also show you your loan balance each month along with the home equity you are accruing at an ideally faster rate thanks to those additional payments.

To determine your home equity, simply take your current property value and subtract the outstanding loan balance. For example, if your home is worth \$500,000 and your loan balance is \$300,000, you’ve got a rather attractive \$200,000 in home equity!

And that’s all it takes to use this mortgage calculator with extra payments. Happy mortgage saving!