David Chen is a Certified Financial Analyst with over 10 years of experience in financial planning and mortgage strategies.
Enter the necessary values to calculate the early payoff savings on your mortgage. This tool helps estimate how making extra payments can save you time and money on your mortgage.
Early Mortgage Payoff Calculator Excel
Early Mortgage Payoff Calculator Formula
Total Payment = Loan Amount × (Interest Rate / 100) × Loan Term
Formula Source: Investopedia
Variables:
- Loan Amount: The total mortgage amount.
- Interest Rate: The annual interest rate.
- Loan Term: The number of years over which you plan to repay the loan.
- Extra Payment: Additional monthly payments to pay off the loan faster.
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What is an Early Mortgage Payoff?
An early mortgage payoff refers to paying off your mortgage loan ahead of schedule. By making additional payments toward the principal, you can reduce the total interest paid and shorten the loan term.
How to Calculate Early Mortgage Payoff (Example)
- Step 1: Enter your current loan amount, interest rate, loan term, and extra monthly payment.
- Step 2: Click “Calculate” to see your new loan term and savings on interest.
- Step 3: Review the detailed breakdown of your early mortgage payoff.
Frequently Asked Questions (FAQ)
Will extra payments reduce my mortgage principal? Yes, extra payments directly reduce your principal balance, which reduces the amount of interest charged.
Is there a penalty for early mortgage payoff? Some mortgages have prepayment penalties, but many do not. Check your mortgage agreement.
How can I calculate how much I can save by paying off my mortgage early? Use a mortgage payoff calculator to input your loan terms and extra payments to see how much you can save in interest.