Use our free Mortgage Payoff Calculator to estimate how quickly you can pay off your home loan. Plan extra payments and save money on interest.

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The Mortgage Payoff Calculator is a helpful tool that shows how you can pay off your home loan quicker. It compares different methods, like: 

• Adding extra payments 

• Switching to biweekly payments 

• Paying off the loan in full 

It also shows how much faster you can finish your loan and how much interest money you can save. 

Understanding Mortgage Payments 

When you make a mortgage payment, it covers two things: 

• Principal – the original money you borrowed 

• Interest – the cost the bank charges for lending you the money 

At the start, most of your payment goes toward interest. Over time, as you pay down the balance, more of your money goes toward the principal. 

The calculator gives you a clear schedule so you can see how your payments are divided month by month. 

Ways to Pay Off a Mortgage Faster 

1. Making Extra Payments 

Adding extra money to your loan cuts down the balance more quickly. 

• Example: On a $200,000 loan at 5% interest, just one $1,000 extra payment can reduce the loan by four months and save over $3,000 in interest. 

Even small amounts added every month can save thousands over the years. 

2. Paying Every Two Weeks 

Instead of paying once a month, you can pay half your amount every two weeks. Since there are 52 weeks in a year, you’ll end up making 26 half-payments (which equals 13 full payments). That means one extra payment per year, helping you pay off your loan faster. 

This is perfect for people who get paid every two weeks. 

3. Refinancing Your Loan 

Refinancing means replacing your current loan with a new one, often at a lower interest rate or shorter term. 

For example, lowering your interest rate by just 1% could save you tens of thousands of dollars over the life of the loan. 

However, refinancing usually comes with fees, so it’s important to compare costs and savings first. 

4. Watch Out for Prepayment Penalties 

Some lenders may charge a fee if you pay off your loan early. These are less common today, but it’s always best to check your contract. Government-backed loans like FHA and VA don’t allow prepayment penalties. 

5. Think About Other Financial Goals 

Before paying extra on your mortgage, ask yourself: could the money be used better elsewhere? 

• Paying off high-interest debt (like credit cards) usually saves more money than extra mortgage payments. 

• Investing in retirement accounts or stocks could bring higher returns than your mortgage interest. 

Balancing debt, savings, and investments is the smart way to build wealth. 

Real-Life Examples 

• Christine wanted to pay off her loan faster, but after talking to her advisor, she realized clearing her 20% credit card debt first saved her much more money. 

• Bob had no debts besides his mortgage, but since his job was unstable, his advisor told him to build an emergency fund before making extra payments. 

• Charles was close to retirement, had savings, and no other debt. For him, paying off the mortgage early meant peace of mind and a debt-free retirement. 

Conclusion 

Paying off a mortgage early can save you thousands of dollars in interest, but it’s not always the best choice for everyone. Use the Mortgage Payoff Calculator to explore your options and pick the plan that works best for your situation. 

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