Paying off a fixed rate mortgage

malmit · Joined: 07 Jan 2007 Posts: 2

I am thinking about paying off my 15 fixed rate year mortgage which has a principal balance of $100000. If I decide to pay it off early then do I still need to pay all the interest which was amortized into the mortage or can I just pay off the $100000 principal balance?

Mac · Joined: 04 Feb 2005 Posts: 276 Location: Knightdale, NC

When you pay off a mortgage in this instance you would only pay off the principal balance. There may be other fees attached depending on how timely the mortgage was paid (late payment fees and unpaid interest), the type of mortgage it is, if there is a Pre Payment Penalty attached, negative balance escrow reserves, and depending on when you anticipate the lender will get the payoff you might have some interim interest aka per diem included which is the earned interest since the most recent payment.