Tuesday, May 7, 2024

Early Payoff
by Scott Bilker
Scott Bilker is the author of the best-selling books, Talk Your Way Out of Credit Card Debt, Credit Card and Debt Management, and How to be more Credit Card and Debt Smart. He's also the founder of DebtSmart.com. More about and DebtSmart can be found in the online media kit.

Scott Bilker

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

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