Applying a lump sum payment towards the principal on our remaining mortgage

We have 5 years left on our mortgage, amounting to $59,000 left to be paid. It was a 15-year fixed at 5.25%. We pay $1,045.05 a month. I would very much like to do away with this mortgage as quickly as I can, just to be done with it. We recently came into some significant extra cash. I am wondering how much sooner I could pay off our mortgage, if say for example, I were to continue making my normal monthly payments BUT ALSO MAKE a one time lump sum ($10,000 for example) payment towards the principal? How much sooner would I be able to pay this bugger off? Current payoff date is set for January 1, 2020.

1 Answer

Does your $1045 include escrows, or is that just principal and interest? IF it's just P&I, and you do the lump sum to take the balance to $49,000, then continue to pay $1045, you'll pay the loan off in just over 4 years. You should note that on that small of loan size, that far into the repayment schedule, the interest you pay is quite minimal. I understand the appeal of having the mortgage paid off, but would advise that you make sure you have ample savings, retirement accounts funded, any other debt paid off (since it would likely be at a higher rate) before putting those funds towards the mortgage. Congrats either way, nice to be near the end of your payments!