Break My Mortgage Calculator

Breaking your mortgage early can save you thousands of dollars in interest payments. Our break my mortgage calculator helps you estimate your potential savings by comparing the cost of paying off your mortgage early versus continuing with your current payments.

How the Break My Mortgage Calculator Works

The break my mortgage calculator estimates your potential savings by comparing two scenarios:

The cost of continuing your current mortgage payments until maturity
The cost of paying off your mortgage early, including any prepayment penalties

The calculator uses the following formula to determine your savings:

Savings = (Total Interest Paid Continuing - Total Interest Paid Breaking) - Prepayment Penalty

Where:

Total Interest Paid Continuing is the total interest you would pay if you continue your mortgage until maturity
Total Interest Paid Breaking is the total interest you would pay if you break your mortgage early
Prepayment Penalty is any fee charged by your lender for early repayment

The calculator assumes you will make all payments on time and at the current interest rate. It does not account for changes in interest rates or other factors that might affect your mortgage.

How to Use This Calculator

Enter your current mortgage balance
Enter your current interest rate
Enter the number of years remaining on your mortgage
Enter any prepayment penalty your lender charges
Click "Calculate" to see your estimated savings

For the most accurate results, use your exact mortgage terms and current balance. The calculator provides an estimate only and should not be used as the sole basis for financial decisions.

Example Calculation

Let's say you have a $200,000 mortgage with 5 years remaining at a 4% interest rate. Your lender charges a $2,000 prepayment penalty.

If you continue your mortgage:

Total interest paid: $40,000
Total payments: $240,000

If you break your mortgage now:

Total interest paid: $16,000
Total payments: $218,000 (including $2,000 penalty)

Your estimated savings would be $22,000.

Frequently Asked Questions

Is it always better to break my mortgage early?: Not necessarily. Breaking your mortgage early may save you money on interest, but you'll lose the benefit of compounding interest on your payments. Consider your financial situation and consult with a financial advisor before making a decision.
What is a prepayment penalty?: A prepayment penalty is a fee charged by your lender if you pay off your mortgage early. The amount varies by lender and mortgage type.
Does this calculator account for tax benefits?: No. The calculator provides an estimate of your potential savings based on interest payments only. You may qualify for tax benefits by breaking your mortgage early, but these are not included in the calculation.
How accurate is this calculator?: The calculator provides an estimate based on the information you provide. For precise calculations, consult with your mortgage lender or a financial advisor.
Can I use this calculator for a reverse mortgage?: No. This calculator is designed for traditional mortgages only. Reverse mortgages have different rules and calculations.