How long will it take to pay off my mortgage?

Small changes can help you shave years off the length of your mortgage. Use our calculator to find out how quickly you can pay off your home by making extra payments.

Calculator fields

• Loan amount. This refers to how much you owe on your mortgage or plan to borrow from a lender.
• Interest rate. Find this rate out on your mortgage statement or by looking at the product review page for the home loan you’re interested in.
• Repayments. These are the payments you make towards your loan to pay if off.
• Repayment frequency. This refers to how often you’ll make payments. Choose weekly, biweekly or monthly installments depending on your pay structure, loan terms and personal preference.

When to refinance to a shorter term mortgage

Even if you shopped around diligently for your current mortgage, it might not be the most competitive option in today’s market. Here are some factors to help you decide if refinancing is the best option to pay off your mortgage quicker:

• Increased income. If your income has increased, you might have extra money to put toward your monthly payment, which you’ll need if you decrease the loan’s term.
• Lower interest rates. Under the right circumstances, refinancing could save you thousands regardless of the term you choose. It can also make your payment lower than it might have been by simply decreasing the loan’s term.
• Your home’s equity. When you refinance, you can choose to cash out your equity. But if you apply it back to your loan, it can bring down the amount you owe and help lower your payment.

Using the calculator, you can adjust the variables to see how much you can shorten your mortgage term and still keep your monthly payment within your budget.

Other ways to pay off your mortgage faster

Refinancing isn’t the only way to reduce the term of your mortgage. Consider the following alternatives before you decide whether refinancing is right for you:

• Make payments more often. Make biweekly instead of monthly mortgage repayments. Because there are a little over four weeks in a month, you’ll end up making two extra payments a year.
• Repay more when you have unexpected funds. Consider dumping your tax refunds, work bonuses or dividends from any other investments. This can also help you cut down the interest payable.
• Increase your payments when interest rates are low. If you have a variable interest rate, keep making the same (or higher) monthly payments when your interest rate goes down — the difference will go directly to your principal.

Watch for prepayment penalties

Regardless of which option you choose, make sure you know the terms of your current mortgage contract. Some lenders charge a prepayment penalty or exit fee for paying off your loan early.
This fee is typically a percentage of the remaining loan balance that is highest in the loan’s early days when you’re paying the most interest and decreases every year. So the earlier you pay off the loan, the higher your penalty will be.
Consider this penalty also when you refinance, because it could be a part of your new loan’s closing costs.

Bottom line

Paying extra on your mortgage can help you cut down the length of your loan and save money on interest. If your interest rate is so high you can barely afford your monthly payments as-is, consider switching to a new, more competitive mortgage.