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Mortgage Prepayment Calculator

A home mortgage will likely be the largest investment they will ever make. It is important that people completely understand how mortgage payments work to decide which plan is best for them. These people need to understand how interest multiplies over the years and is not a flat rate that can be easily calculated. People looking to purchase a home also need to evaluate how much they can afford each month, as they will also be paying annual property tax on their residence. Property tax can really haunt people if they do not budget for this expense. The good news is that people can easily figure their monthly payments with the mortgage prepayment calculator.

What is Mortgage Prepayment?

The lender will give borrowers a payment schedule and set amount that is due each month. They base this amount for borrowers who plan to make payments over the entire duration of the loan. However, the first several payments usually just pay the interest on the loan and do not reduce the principle by a significant amount. However, people have the option of mortgage pre payment. Essentially during mortgage prepayment, the borrower will pay an extra amount towards the loan every month.


With mortgage prepayment, borrowers will end up paying their loan off in less time. Therefore, they will end up paying less than loan value for the home if they pay it off early. Borrowers will also find that trading a little entertainment money for paying off their home early will relieve a lot of stress in the long run.


There are only a few cons in regards to mortgage prepayment. People may find that the extra money they applied towards the loan is going to leave them short on funds to pay other expenses. However, this is something that can typically be overcome by establishing a budget.

People should use sites like to search for a loan before signing with a direct lender or broker. These will allow them to shop with many lenders for the best rate in less time than it would take to speak with a direct source. Lenders also face more competition in these online databases than they do in direct scenarios.

National Rate Averages

Mortgage Rates

Product Rate
5/1 yr ARM 3.147%
1 yr ARM 3.299%
15 yr fixed 3.221%
30 yr fixed 3.815%

Home Equity Rates

* Updated Jun 7, 2012