If you’re thinking about getting a mortgage and plan to pay it off early in some way, you may want to ask your lender about an open-end loan.Īlso, not all borrowers are in the same financial situation. For instance, closed-end loans-which make up most standard mortgages-can restrict prepayments entirely or require borrowers to pay a heavy penalty if they pay off or refinance their loan within a certain number of years (typically three to five). However, some types of mortgages come with prepayment penalties.
After all, not having that recurring monthly payment while also getting to own your home free and clear can be a liberating feeling.
Many people with the resources may think paying off their mortgage early makes sense.
Current mortgage payment: The monthly payment, principal and interest, based on your original mortgage amount (doesn’t include current homeowners insurance or taxes). This rate will be lower than your annual percentage rate (APR), which does include these fees. Annual interest rate: The simple interest rate on your loan that doesn’t include private mortgage insurance (PMI), the origination fee or point(s) paid at the beginning of the mortgage. This is not to be confused with the remaining principal balance. Remaining mortgage amount: The amount you still have financed, including interest. Original mortgage term: The length of your original mortgage in years (15-, 20- and 30- year terms are the most common). Years remaining: The number of years left on your mortgage term. Current mortgage payment: The monthly payment, principal and interest, based on your original mortgage amount (doesn’t include current homeowners insurance or taxes)Īs you use the calculator, there are some mortgage terms that you’ll need to know. Annual interest rate: The simple interest rate on your loan that doesn’t include private mortgage insurance, the origination fee or point(s) paid at the beginning of the mortgage (this is why this rate is lower than your annual percentage rate (APR), which does include these fees). Remaining mortgage amount: The loan amount you still need to pay, including interest (don’t confuse it with the remaining principal balance). Original mortgage term: The length of your original mortgage in years (15-, 20- and 30- year terms are the most common). Years remaining: The number of years left on your mortgage term. Years left on the original mortgage termĪs you use the calculator, there are some mortgage terms that you might need to know. Number of years in which you’d like to pay off your mortgage, if applicable. Original loan term (years your mortgage spans). Make sure you already know or have the following handy: This calculator will provide good results but you may want to also talk to your loan provider to get a calculation from them.How To Use This Mortgage Payoff Calculatorīefore you start, you’ll need to gather some information. (payment = principal + interest) Monthly Extra the extra amount you plan to add to your monthly payments on this mortgage. This value is not always easy to find but usually you can look at your last statement to find the amounts applied to principal and interest and add these 2 numbers together. DO NOT include insurance or taxes or escrow payments these are not applied to your loan. Current Monthly Mortgage Payment the amount currently to be paid on this mortgage on a monthly basis toward principal and interest only. Note that this is the interest rate you are being charged which is different and normally lower than the Annual Percentage Rate (APR). To also run scenarios for new payments by changing the loan term tryĬurrent Mortgage Balance the outstanding principal when calculating a current mortgage or the original amount on a new loan Interest Rate the annual nominal interest rate or stated rate on the loan. (negative extra payments to pay less) Create an amortization schedule. Use this calculator to calculate repayment of your mortgage and add extra payments to find how much it reduces the length of your loan term and the amount of interest you can save over the life of the mortgage.
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