How can I pay off my mortgage in one year?

Mar 16, 2012

Keith Gumbinger, HSH.com

Q: How much extra principal would I have to pay each month to pay off my $53,000 mortgage in a year?

A: The answer is simple, if you continue to make your regular mortgage payment, you can simply send in one-twelfth (1/12) of the remaining principal in the first month ($53,000 divided by 12). This will give you a dollar amount of $4,416.67 per month. Your next month's principal addition would be one-eleventh of the outstanding balance, then one-tenth of the outstanding balance the next month, and so on.

You can essentially do this for any term, simply by dividing the remaining balance at the end of each month with the desired remaining term of

the loan.

This would of course be a principal payment in addition to your regular mortgage payment. Your regular payment does also include some principal, so you'll need to know the remaining balance of the loan at the end of each monthly period to calculate the exact monthly payment you'll need to send in each month.

If you have information handy for the original loan amount, the loan's original start date, and interest rate and term, you can use HSH.com's "It's My Term" mortgage prepayment calculator to do the math for you! Just plug in the desired final payment date and the calculator will produce the additional monthly payment you'll need to hit your time goal. Good luck!

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Source: library.hsh.com

Category: Credit

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