Why paying off your mortgage early could save you millions

Understanding how mortgage interest is calculated can help borrowers make smart financial decisions throughout the life of the loan.

Photo credit: Shutterstock

You walk to your bank and take a Sh30 million mortgage. The repayment period is 20 years, giving you monthly instalments that comfortably fit your income.

Life takes an unexpected turn two years later. Perhaps your business flourishes, you receive a substantial inheritance or you sell another property at a handsome profit, making you enough money to clear the mortgage balance.

PAYE Tax Calculator

Note: The results are not exact but very close to the actual.