DebtSmart.com Wednesday, April 24, 2024

Early Payoff

by Scott Bilker
Scott Bilker Scott Bilker is the founder of DebtSmart.com and author of the best-selling books, Talk Your Way Out of Credit Card DebtCredit Card and Debt Management, and How to be more Credit Card and Debt Smart. Receive the 5-Year Loan Spreadsheet when you subscribe to his email newsletter.

Scott,
I would like to pay off my 80K-15 year, 7.74% mortgage in 8-10 years? How much per month or year do I have to make to reach this goal?
–John

John,

Thanks for writing–your question is a great Household Math™ problem! In fact, you just inspired me to add a section so people can submit their Household Math™ questions.

Your question is very straightforward. You have an $80,000 mortgage for 15 years at 7.74%. Assuming these numbers are exactly correct, and no payments have been made to-date, the monthly payment is $752.57.

To pay off $80,000 at 7.74% in 8 years requires a monthly payment of $1,120.40. This saves you $27,904.20 over the 15-year loan.

To pay off $80,000 at 7.74% in 10 years requires a monthly payment of $959.67. This saves you $20,302.20 over the 15-year loan.

Therefore, any monthly payment greater than or equal to $960 will achieve your goal of paying of the loan in 10 years or less.

Regards,
Scott