Quickly paying off a house

[HFD38]

Here is a link for an early payoff calculator

https://www.nerdwallet.com/article/mortgages/early-mortgage-payoff-calculator

[kae006]

Lots of people recommending a refi. Use a breakeven calculator before you jump into a refi.

https://www.mortgagecalculator.org/calcs/refinance-breakeven.php

To answer your original question, assuming you started paying an extra $600 in principal this month, you would pay off your house 10/2027. While it wouldn't make sense for most people at today's interest rates, I think it would behoove you at 5% to make the extra payments, especially if your money is not working for you in other ways.

[Mudcatz]

I know we should have someone on the GS that could answer this.

Still owe on the house : $67,000
Monthly payment: $715
Interest is 5%
Approximately 20 yrs still to pay

If a payment of $600 was sent in every month to go straight to principal, how soon would the house be paid off?


I have no idea if I will do this, it’s something I just thought about and was wondering.

I’m not a pro but just running it thru my head I’d guess around 5 years.

[kumathebear]

You got some very good recommendations and my comment is this: I don't know how old you are, but the goal in my opinion should be to have it paid off by the time you retire period! BEST thing my wife and I did was having our mortgage paid off by the time we both retired. Like many, we have some friends in their late years still paying a mortgage and struggling every month. Do what ever you can do to get it paid off and good luck!!

[troutthink]

Not sure I would refinance. $600 extra per month would get it done in 7 years or so according to bankrate's calculator. Also saves $28K in interest payments.

bankrate.com/calculators/mortgages/mortgage-loan-payoff-calculator

We are trying to get ours done before retirement as well.

[hpdrifter]

Lots of people recommending a refi. Use a breakeven calculator before you jump into a refi.

https://www.mortgagecalculator.org/calcs/refinance-breakeven.php

To answer your original question, assuming you started paying an extra $600 in principal this month, you would pay off your house 10/2027. While it wouldn't make sense for most people at today's interest rates, I think it would behoove you at 5% to make the extra payments, especially if your money is not working for you in other ways.

kinda what I was thinking. He's paying in today's dollar. Put it in a Roth and pay with tomorrow's dollar.

[txhunter90]

Mortgage repayment shortened by 14 years and 8 months.

Based on a mortgage calculator.

[BrianL]

I know we should have someone on the GS that could answer this.

Still owe on the house : $67,000
Monthly payment: $715
Interest is 5%
Approximately 20 yrs still to pay

If a payment of $600 was sent in every month to go straight to principal, how soon would the house be paid off?


I have no idea if I will do this, it’s something I just thought about and was wondering.

You must have an escrow account, because the above #s are for a 10 year payout.

[BrianL]

Making some assumptions that your term is correct and you have escrow your current P&I payment is $445ish. If you added $600 to your payment of $445 it would payoff in about 75 months.

[JBJTX81]

This.

You'll end up with a net gain assuming your investment earns north of 5% which should be no problem.

You don't even have to average 5% returns for this to be a net gain. The dollar is weakening and asset prices are inflating. If you look at the value of a dollar and the appreciation in the value of the house. He will have paid and effective rate of 0-1% on his home. Put the money in Roth and keep paying your mortgage.

Cheap long term debt IS NOT A BAD THING! ITS HOW PEOPLE BUILD WEALTH AND BEAT INFLATION!

[BrianL]

You don't even have to average 5% returns for this to be a net gain. The dollar is weakening and asset prices are inflating. If you look at the value of a dollar and the appreciation in the value of the house. He will have paid and effective rate of 0-1% on his home. Put the money in Roth and keep paying your mortgage.

Cheap long term debt IS NOT A BAD THING! ITS HOW PEOPLE BUILD WEALTH AND BEAT INFLATION!

While I love a Roth, and it is a GREAT investment tool, not sure I would go Roth in this case with markets at record highs. He could have his house paid off in 75 months then start putting Max $/mth into the Roth. Still depends on lots of factors though, age, like years to retirement, etc.

[tazhunter0]

Wife will be retired in 5-6yrs. I will get to retire when they put me in the ground and probably still get up and go to work the next day afterwards.

[BrianL]

IMO pay the house off. House will be paid off about the time she retires.

[tazhunter0]

I’m 51 and wife is 58. I just want to get it paid off b4 I kick off.

[Evictor]

Lots of people recommending a refi. Use a breakeven calculator before you jump into a refi.

https://www.mortgagecalculator.org/calcs/refinance-breakeven.php

To answer your original question, assuming you started paying an extra $600 in principal this month, you would pay off your house 10/2027. While it wouldn't make sense for most people at today's interest rates, I think it would behoove you at 5% to make the extra payments, especially if your money is not working for you in other ways.

At 5% another option if you have good credit is to look into a refi and opt for negative points so the lender covers all the fees and they are not rolled back into the amount financed.

Would end up roughly 15 year at 3% instead of current 2.65%
Your monthly note would be the same or very close and will still be able to pay extra and have it paid off early 5-6 years

You will still need to come up with the cash to cover your escrow account but it should be very close to what you already have in escrow and will get a check back from your current lender in a few weeks.

Will have to crunch the actual numbers to see if it works to your advantage this far into it it may not be worth it.