Purchasing a house is likely to be the single largest expense any of us will have in our lives. And unless you’ve got a load of money to purchase your home in a lump sum, you are probably going to have to take out a loan to achieve your dream of home ownership.
Usually, this will involve borrowing money from a lender or lending institution, such as a bank, in order to pay for our homes. This is called a mortgage loan. It’s a debt that we will have to pay off over time.
When getting a mortgage, many people have the question “how long will it take to pay off my mortgage?”
There is no one set answer for everyone. Each situation is different and mortgages can last for different lengths of time. Also, it is possible to pay your mortgage off early.
Below we’ll share some information with you so you can figure out how long it will take to pay off your mortgage. Also you’ll learn about what’s involved in paying off a mortgage early and how to calculate the amount you’ll need to come up with to do so.
How Long Will It Take To Pay Off My Mortgage?
How long it will take for you to pay off your mortgage loan will depend. Various factors will affect your payoff date in a mortgage loan.
The term of your loan is a big one. If you’ve been making any additional payments along the way is another.
There are also online calculators available to help you figure out how long it will take you to pay off your mortgage. They use specific formulas to help homeowners understand their mortgage payments better.
One good one to use is a formula from CalcXML. To show you how the formula works and the information you can get from it, we’ll use an example with the following figures:
- Current loan amount – $245,250
- Current monthly payment – $1,100
- Annual percentage rate – 3.16%
According to this calculator and the figures provided, it will take nearly 340 more payments and 28.1 years to pay off your remaining balance. The total amount of interest will be $124,746.
If you want to use CalcXML’s calculator, you will need the following figures to find out how long your mortgage pay off would be:
- Your current loan balance
- Your Annual Percentage Rate
- Your Current Monthly payment
You can plug these values into their convenient online calculator.
How To Calculate An Early Mortgage Payoff
But if you wish to pay off your mortgage early, let’s say that you have a 15-year mortgage contract and have paid off at least five years. Now you’ve come into some money and want to see what it would take to pay the whole thing off within the next 5 years.
Here we suggest using NerdWallet’s calculator. Using this calculator, you need to input the following requirements:
- Original mortgage balance
- Your current balance
- Original loan term
- Interest rate
- How many years are left on your current mortgage loan
- The number of years in which you want to pay off your mortgage
Using this calculator, let us say that the figures are:
- Original mortgage balance – $400,000
- Your current balance – $250,000
- Original loan term – 15 years
- Interest rate – 4.5%
- How many years are left on your current mortgage loan – 10 years
- The number of years in which you want to pay off your mortgage – 5 years
To reach your goal, your new monthly principal would be $4,660.75 compared to the rate you originally paid, which is $3,059.97.
Compared to your original principal with added interest rates of $550,795.17, your new and total interest payment plan would be $463,243.39, allowing you to save $87,551.78.
Use NerdWallet’s calculator here.