Mortgage Prepayment Calculator - Save Interest & Pay Off Early
Mortgage Prepayment Calculator
Original Amortization Schedule
Monthly Amortization Schedule
| Baseline Amortization Schedule | Amortization Schedule with Prepayment | ||||||
|---|---|---|---|---|---|---|---|
| Month | Date | Interest | Principal | End balance | Interest | Principal | End balance |
What Happens if I Pay an Extra $1,000 a Month on My Mortgage?
On a $200,000 30-year fixed-rate mortgage at a 6% interest rate - your monthly payment would be $1,199.10.
If you pay an extra $1,000 each month, bringing your total to $2,199.10, you'll pay off the entire loan in just 10 years and 2 months.
That's 19 years and 10 months earlier than the original schedule, and you'll save a whopping $164,268.14 in interest. Pretty significant difference!
How Many Years off Mortgage With an Extra $10,000 Annual Payment?
If you have a $400k loan at 6% for 30 years.
Making an extra $10,000 payment each year can really speed things up: without extra payments, you're looking at the full 30 years.
But add that $10k annually, you'll be done in just 16 years and 6 months. That's cutting your mortgage timeline nearly in half!
Is It Worth Overpaying My Mortgage by $100 a Month?
Yes, overpaying your mortgage by $100 a month is generally worth it because it reduces the loan principal faster, decreases total interest paid, and can shorten the loan term, saving you money in the long run.
How to Pay off a $400,000 Mortgage in 5 Years?
To pay off a $400,000 mortgage in 5 years, you need to make significantly higher monthly payments than a standard long-term loan. Specifically:
- Determine your loan’s interest rate.
- Use the amortization formula to calculate the required monthly payment for a 5-year term.
- Alternatively, consult a mortgage calculator or lender for the exact payment amount.
Example:
If your interest rate is 7% APR, the monthly payment to pay off $400,000 in 5 years would be approximately $7,920.48.
This large payment covers both principal and interest to fully repay the loan in 60 months. Keep in mind that you must be financially prepared for these higher payments or consider refinancing options.
How to Cut 15 Years off a 30-year Mortgage?
Increase your monthly payments or refinance to a 15-year loan to cut 15 years off a 30-year mortgage.
Example:
If your monthly mortgage payment is $1,610.46 on a $300,000 loan at 5% interest for 30 years, paying about $2,372.38 instead (an extra $762) monthly could shave off 15 years from your mortgage term, depending on exact terms.
When Should I Not Make Prepayments?
Here are some situations where prepaying your mortgage might not be your best move:
Low Interest Rate - If your mortgage rate is below 4%, you might do better investing that extra money elsewhere where you can earn higher returns.
High-Interest Debt - Got credit cards or other debt charging 6-8% or more? Pay those off first - they're costing you more than your mortgage.
Emergency Fund - Don't have at least 6 months of expenses saved up? Build that safety net before throwing extra money at your mortgage.
Employer 401(k) Match - If you're not maxing out your employer's matching contributions, you're leaving free money on the table. Get that match first.
PMI Threshold - If you're close to hitting 78% loan-to-value ratio, you might be better off focusing on removing PMI instead of making extra payments beyond that point.
References
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