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Concerned about the rising price of eggs? You’re not alone. Prices have soared around the country as a widespread avian flu outbreak affects the availability of eggs. As of January 2025, the average cost of a dozen eggs in the U.S. is $4.95, according to data from the U.S. Bureau of Labor Statistics (BLS). This is higher than in previous years, including the $4.82 consumers paid on average in January of 2023, when concerns about egg shortages sent the cost of eggs skyrocketing.

Why does knowing the cost of a dozen eggs today matter? If you’re trying to manage your household budget, then keeping food costs as low as possible might be a priority. Where you live can play a part in determining how much you’ll pay for a dozen eggs.

What Is the Average Cost of a Dozen Eggs Today?

On average, Americans are paying $4.95 for a dozen Grade A large eggs, based on the BLS data. That price reflects the most recent Consumer Price Index (CPI) data available as of January 2025. The CPI Consumer Price Index tracks prices for a basket of consumer goods and services over time.

In tracking egg price data, the CPI looks at average numbers by city, rather than state. Prices are based on the cost of a dozen eggs only and don’t take into account pricing for smaller or larger quantities of eggs sold, or pricing for different sizes of eggs. The CPI’s egg price data offers a snapshot of how egg prices have moved up or down over time. The average cost of a dozen eggs increased sharply in the beginning of 2023, declined for a while, and then began going back up in July 2024. Whether you live alone or are supporting a family, these types of fluctuations can impact your grocery budget.

If you’re trying to manage a higher-than-normal grocery bill, tracking your spending can help.

Where the Cost of Eggs Is Highest

As evidenced by the price data, some states are more expensive than others when it comes to what you’ll pay for a dozen eggs on average. In descending order, here are the 10 states that had the highest cost overall for a dozen eggs:

•   Hawaii

•   California

•   Florida

•   Alabama

•   Nevada

•   California

•   Arizona

•   Georgia

•   Wyoming

•   Maine

•   Colorado

Where the Cost of Eggs Is Lowest

Where is the average cost of a dozen eggs the cheapest? Shoppers paid the least for a dozen eggs in these states:

•   Missouri

•   Nebraska

•   Indiana

•   Ohio

•   Kansas

•   Iowa

•   Kentucky

•   Pennsylvania

•   Alaska

•   West Virginia

As you can see, most of these states are located in the central, southern, and eastern U.S., though Alaska is the outlier. Assuming food costs are lower overall in these states, the average grocery budget for a family of 5 is likely to be less compared to the states where eggs are more expensive.

Why Did the Cost of Eggs Increase

The current spike in egg prices is largely fueled by scarcity. An outbreak of avian flu sent egg production into decline as more than 20 million laying hens were lost to the disease or depopulation efforts just in the last quarter of 2024. With fewer eggs in supply but demand not easing, egg prices began to climb. Severe winter weather events across the country didn’t help matters.

But inflation can also be pointed to as a contributing factor to rising egg prices. In simple terms, inflation is a rise in prices for things consumers buy, like eggs and other household items. Knowing how to find the inflation rate and what’s considered to be a normal range matters for making the most of your money.

You don’t need a money tracker to know that when inflation is higher, everything costs more and your money doesn’t go as far. A difference of a few cents in the price of a dozen eggs might not seem like much. But when everything else is going up in price too, and inflation doesn’t appear to be easing any time soon, it can take a serious toll on your wallet.

When Will the Cost of Eggs Go Down?

While it’s nearly impossible to know exactly when egg prices will decline, the USDA is predicting that it will happen by April 2025. Prices are projected to fall to $2.50 per dozen in the second quarter of the year and to $2.10 by the third quarter.

Monitoring prices for different goods and services can help you stay on top of your budget. Making and sticking to a spending and savings plan is one of the most basic steps for building wealth and increasing your net worth. Being able to measure your liquid net worth can give you an idea of how well you’re doing financially when it comes to accumulating assets and paying down debt.

Tips on How to Shop for Cheap Eggs

Shopping for eggs on the cheap can save you money and make it easier to live below your means. Living below your means benefits you in a few ways. For one thing, you may be less reliant on credit cards to cover expenses if you always have extra cash in your budget. And for another, it can make it easier to adapt to economic changes that can affect your budget and spending.

With that in mind, here are a few quick tips to help you pay less for eggs.

•   Shop the farmer’s market. Buying eggs locally from a farmer’s market vs. a supermarket could save you money if you’re able to find lower prices. You may even be able to work out a barter or trade with a local farmer or neighbor who has a backyard flock, which could allow you to get eggs for free.

•   Choose store brands. Store-brand products, including eggs, typically cost less than name-brand ones. If you’re not partial to any one egg brand, you may save a little money by choosing your local store’s brand.

•   Buy eggs in bulk. Buying in bulk could save you money if you’re paying a lower unit price per egg. But the catch is that you have to be sure you’re actually going to use them all; otherwise, you could be wasting money.

•   Use fewer eggs. A simple way to save money on eggs is to not consume as many. For instance, you might opt to get your daily protein from other sources or swap out your favorite baking recipes for ones that don’t incorporate eggs.

•   Shop with coupons and cash back apps. Couponing may seem tedious but supermarkets make it easier by allowing you to load digital coupons to your store loyalty card. You can pair coupons with a cash back app that pays you a percentage back when you shop at partner grocery stores, which can add to your savings.

The Takeaway

The average cost of a dozen eggs might not be something you think about on a day-to-day basis. But knowing how much you’ll pay for eggs matters when it’s time to go to the grocery store and do your weekly shopping. Keeping an eye on egg prices and implementing some different hacks for finding cheap eggs can help you keep your food budget in check.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

How much did a dozen eggs cost in 2023?

As of July 2023, the average cost of a dozen eggs was $2.09, according to Consumer Price Index data. Overall, egg prices were on the decline by mid-2023 after peaking at $4.82 on average per dozen at the beginning of the year.

What state has the most expensive eggs?

Hawaii residents pay the most for a dozen eggs. On average, a dozen eggs there costs just under $10.

Do eggs last longer than sell by date?

Eggs can stay fresh past the sell by date, but there are limits on how long you’ll be able to use them. A simple way to tell if an egg is fresh is to place it in a glass or bowl of water. Eggs that float to the surface are no longer fresh, while ones that lie flat on their side are the freshest.

About the author

Rebecca Lake

Rebecca Lake has been a finance writer for nearly a decade, specializing in personal finance, investing, and small business. She is a contributor at Forbes Advisor, SmartAsset, Investopedia, The Balance, MyBankTracker, MoneyRates and CreditCards.com. Read full bio.

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SORL-Q125-070

If you’re thinking of applying for a $600K mortgage, here’s the bottom line: The monthly payment on this mortgage at a 7% annual percentage rate (APR) for 30 years works out to be $3,991.81.

If you would rather finance with a 15-year mortgage, the monthly payment would be $5,392.97.

A higher monthly payment on a 15-year mortgage term does cost more every month, but the savings over the life of the loan are huge. Interest costs for a 30-year loan exceed $830,000, while the interest costs on a 15-year loan are closer to $370,000. That’s quite a difference.

And, of course, interest rates are not static. The rates you are offered when you apply for a loan will vary over time. Just a short while ago, many borrowers would have access to an interest rate approximately half the current 7% figure. A 3.5% APR with the same $600K mortgage over 30 years would result in a monthly payment of $2,694.27. That’s the power interest rates have on your mortgage and monthly payment.

Keep reading to learn about all the costs involved on a $600,000 mortgage and how they affect your monthly payment.

Total Cost of a $600K Mortgage

The cost of a $600K mortgage goes beyond the monthly payment. You’ll have upfront costs, like the down payment and closing costs, as well as the long-term interest costs.

Upfront Costs

When you acquire a mortgage, your upfront costs include your down payment and closing costs.

•   Closing costs: Closing costs, or settlement costs, are what you pay to obtain the mortgage and property title. It varies, but you’ll usually pay for an appraisal, origination fee, prepaids, tax service provider fees, government taxes, and title insurance. The average closing cost on a new home is somewhere between 3% and 6%. For a $600,000 mortgage, that’s between $18,000 and $36,000.

•   Down payment: According to the National Association of Realtors, the average down payment on a home is 13%. For a $600,000 home, that’s a $78,000 down payment. Other common down payments include:

•   3%: $18,000

•   3.5%: $21,000

•   5%: $30,000

•   20%: $120,000.

Recommended: Home Loan Help Center

Long-Term Costs

The long-term costs of a $600K mortgage are also important to consider. They’re considerable. If you pay on your $600K mortgage for all 30 years at that 7% APR, you’ll pay over $800,000 in interest costs alone, as mentioned above. For 15 years, that amount comes down to $370,000.

You can play around with our mortgage payment calculator if you’re interested in seeing the difference that APR and loan term make on a monthly payment.

Estimated Monthly Payments of a $600K Mortgage

The monthly payments on a $600K mortgage can vary widely. How much house can you afford depends not only on the down payment but also the monthly payment you’re able to make. Your interest rate and loan term are important factors to consider.

Monthly Payment Breakdown by APR and Term

It’s helpful to see what your monthly payment would be based on different interest rates and loan terms for a $600K mortgage loan.

This chart can help you understand how mortgage APR works and impacts your costs.

How Much Interest Is Accrued on a $600K Mortgage?

There’s another factor to consider when choosing a mortgage term for a $600K mortgage: the interest that will accrue.

If you pay the exact amount of your monthly payment on a $600K mortgage for an entire 30-year term with a 7% APR, you will pay $837,053 in interest. Adding in your $600K mortgage brings the total amount you will pay to $1,437,053.

A 15 vs. 30 year mortgage tells a different story when it comes to how much interest you pay. A 15-year loan on a $600K mortgage with a 7% interest rate has a larger monthly payment at $5,392.97, but the interest cost is $370,734.53. Compare that with the $837,053 interest costs of a 30-year loan, or $3,991.81 per month. In terms of total costs, the 15-year loan will add up to $970,734.53, while the 30-year mortgage equals $1,437,053 for principal plus interest.

$600K Mortgage Amortization Breakdown

We’ve already discussed how the total cost of a $600K mortgage is over 1.4 million dollars. When you look at how much of your monthly payment is applied to the principal loan amount (this is also called amortization), it’s easy to see how you end up paying so much in interest costs.

Amortization schedules are set so that more of your monthly payment goes toward interest than principal in the beginning. Toward the end of your loan, more of your monthly payment goes toward the principal amount of the loan.

Looking at the amortization schedule can help you see the full picture of what you’re paying on your $600K mortgage payment and perhaps choose which type of mortgage loan is best for you.

The amortization schedule below assumes a 7% interest rate over 30 years. The amount does not include insurance or taxes; it’s principal and interest for informational purposes only.

What Is Required to Get a $600K Mortgage?

You need to have an income sufficient to afford the monthly payments on a $600K mortgage.

Lenders generally look for your monthly payment to be no more than 28% of your gross income. For a $600K mortgage with a $3,991.81 payment, you would need to make $14,256 per month, or $171,077 per year (without any debt) to comfortably afford the mortgage payment.

Other factors, such as your credit score, will likely come into play as well in getting approved for a $600K mortgage.

How Much House Can You Afford Quiz

Recommended: First-Time Homebuyer Guide

The Takeaway

A $600k mortgage payment at 7% for 30 years would be $3992 per month. When you’re budgeting for a mortgage, it’s smart to consider all the costs, including the monthly payment and what a smaller monthly payment means for your long-term costs. Deciding whether to pay more each month and less over the life of the loan or vice versa can have a significant impact on your financial outlook and how you grow your personal wealth.

When you’re ready to take the next step toward a mortgage, consider what SoFi has to offer. With competitive interest rates, flexible loan terms, and a simple application process, your $600K mortgage could become a reality.

FAQ

How much would a $600,000 mortgage cost per month?

A monthly payment on a $600K mortgage at 7% APR would be $3,991.81. This is the amount of principal and interest and does not include the escrowed amounts.

What is the average monthly payment on a 500k mortgage?

A monthly payment on a 500K mortgage would be $3,326.51 on a 30-year term with a 7% APR.

How much do you need to make a year to afford a $500,000 home?

A 30-year $500,000 loan with a 7% APR boils down to a $3,326.51 monthly payment. For $3,326.51 to meet the 28% income guideline for lenders, you would need to make $11,880 a month, or about $142,560 per year. And this amount is only possible if you have no other debts.

Photo credit: iStock/FabioBalbi

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

The monthly cost of a $500,000 mortgage is $3,360, assuming a 30-year loan term and a 7.10% interest rate. Over the course of a year, you would pay $40,320 in combined principal and interest payments.

If you were to opt for a 15-year term instead, a $500,000 mortgage at an interest rate of 6.00% would cost you $4,219 per month, or about $50,628 per year. (Generally speaking, 15-year terms feature lower interest rates than 30-year terms.)

As you can see, the monthly cost of a mortgage can vary widely depending on your terms; you’ll want to consider this alongside the other short- and long-term costs of homebuying, like lender fees, property taxes, and maintenance. We’ll guide you through these expenses and how they factor into your budget.

Total Cost of a $500K Mortgage

The total cost of a $500K mortgage is $1,209,658 over 30 years at a 7.10% APR. Absent any late or pre-payments, this adds up to $709,658 worth of accrued lifetime interest.

When calculating your total costs, you’ll want to factor in other expenses like closing costs, as well as property taxes and insurance, which are incurred for as long as you own your home. We’ve categorized these expenses into upfront and long-term costs below.

💡 Quick Tip: Buying a home shouldn’t be aggravating. SoFi’s online mortgage application is quick and simple, with dedicated Mortgage Loan Officers to guide you from start to finish.

Upfront Costs

Your average upfront closing costs will usually set you back 2%-5% of the total purchase price on your home. The actual amount varies depending on your local tax rate and third-party fees. Closing costs typically include the following:

•   Abstract and recording fees: $200 to $1,000 and $125, on average, respectively

•   Application fees: up to $500

•   Appraisal fees: $300 to $600

•   Attorney fees: $150 to $500/hour or as a project fee

•   Home inspection fee: $185 to $511

•   Title search and title insurance fees: 0 $75 to $200 and 0.5%-1.0% of the mortgage, respectively

The other two major upfront costs include the earnest money deposit and your down payment on the house. Your earnest money deposit shows the seller that you’re serious about buying the home, while the down payment serves as security for your mortgage lender. Average down payments usually range from 3%-20% of the home’s purchase price, based on most popular mortgage underwriting guidelines. Earnest money and the down payment differ from closing costs as you’ll recoup these in the form of equity in your home, after closing.

Long-Term Costs

Long term costs on a home purchase include property taxes, homeowner’s insurance, and upkeep. Many lenders will simplify your annual payments by rolling taxes into escrow alongside your monthly mortgage payments. Homeowners who opt out of escrow will be responsible for making their own payments.

Property taxes can range from less than 0.5% to more than 2.00% of your home’s assessed value. Keep in mind that the assessed value isn’t the same thing as your home’s market value; instead, it is the value local tax assessors use for calculating property taxes.

Average homeowners insurance rates vary widely depending on your state of residence, policy terms, and the condition of your home. Policy rates currently average $2,110 per year.

Maintenance and upkeep costs are some of the most variable expenses you’ll face on your home. You may have to repair your roof or replace your water heater in some years, but in others, you may get lucky and avoid big expenses. It’s a good idea to set aside 1%-2% of your home value annually to cover these projects if they pop up.

Estimated Monthly Payments on a $500K Mortgage

As noted above, your estimated monthly payment for a $500K mortgage will be $3,360.16, assuming a 30-year loan term and an interest rate of 7.10%. But this payment could range between roughly $2,600 and $4,900, depending on your term and interest rate. It’s helpful to take a closer look at how these factors impact the monthly charge, as we have in the chart below.

Monthly Payment Breakdown by APR and Term

Assuming both 30-year and 15-year loan terms, we’ve broken down the monthly payment estimates for interest rates ranging from 5.00% – 8.50%. If you don’t see your rate below, try using our mortgage payment calculator to estimate your required monthly payment.

Recommended: The Cost of Living by State

How Much Interest Is Accrued on a $500K Mortgage?

A $500K mortgage with a 7.10% APR will accrue $709,658 worth of total interest over 30 years. A 15-year mortgage with the same loan balance and interest rate will accrue $313,985 in interest over the lifetime of the loan.

Interest accrues directly in relation to your outstanding loan balance, APR, and rate of repayment. The faster you repay your home loan, the less time interest has to accrue.

Additionally, larger loan balances will accrue more interest at any given rate, as larger balances mean a larger principal base on which interest is calculated. Similarly, higher interest rates accrue interest faster, as the APR multiple used to calculate your interest expense is greater for all loan balances.

Ideally, you want to keep your applications for preapproval to within the same 14- to 45-day period, since many hard credit pulls outside the given time period can adversely affect your credit score, which in turn affects the mortgage terms you’ll be offered.

💡 Quick Tip: Not to be confused with prequalification, preapproval involves a longer application, documentation, and hard credit pulls.

$500K Mortgage Amortization Breakdown

It’s helpful to put monthly payments on a $500K mortgage in context by looking at an amortization schedule, which breaks down payments by interest and principal. In the example below of a 15-year, $500,000 mortgage at 6.00%, you can see that only $21,208.34 worth of principal was paid off after the first year, despite the buyer having made more than $50,000 worth of total payments. This is due to the front-weighted nature of amortizing loans.

Interest is calculated on the total principal amount of the loan outstanding. This means that your interest expense will be greater during the early years of home loan, when the remaining loan balance is greatest.

As time passes and principal is paid off, your interest expense will gradually decrease over time. This is why many homebuyers choose to contribute a larger down payment upfront to avoid having to pay more interest.

What Is Required to Get a $500K Mortgage?

To qualify for a $500K mortgage, you’ll need to ensure that you meet the income, credit, and down payment requirements, while still having enough left over to cover additional long-term costs like taxes and home insurance.

While income requirements can vary by lender, a good rule of thumb to follow is the 28% rule, which states that your total housing costs should make up no more than 28% of your monthly gross income. This isn’t a hard and fast rule, but serves as a good indicator of whether you can afford your mortgage.

For example, if your $500K mortgage carried a 6.00% APR and a monthly payment of $2,998, and you had another $300 in monthly housing costs, you’d need a minimum gross monthly income of approximately $12,000, or annual income of $144,000, to fall within the 28% rule.

You’ll also need a minimum credit score of 620 or higher to meet the lender’s credit guidelines. A score of 620 is only the minimum bar to qualify according to mortgage lending guidelines, and your likelihood of approval may still be tenuous at this level.

In most cases you’ll want your credit score to be much higher; preferably 740 or more, to ensure you can qualify for the most competitive interest rates.

Finally, depending on the type of mortgage loan you obtain, you’ll need to provide a minimum down payment on the home. In many cases, this is 20% of the overall home value. For a $625,000 home with a $500,000 mortgage, a 20% down payment would be $125,000.

How Much House Can You Afford Quiz

The Takeaway

Committing to pay off a $500,000 mortgage loan is a significant decision. You’ll be on the hook for thousands of dollars a month in mortgage payments. Even slight variations in your interest rate can increase the lifetime cost of the loan by tens of thousands of dollars, so looking carefully at your mortgage’s total cost is important.

“Really look at your budget and work your way backwards,” explains Brian Walsh, CFP® at SoFi, on planning for a home mortgage.

Once you have assessed how much you can afford, getting the best rate possible for you and understanding the full range of costs will let you make an informed decision, work within your budget, and enjoy your new house.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

FAQ

How much does a $500,000 mortgage cost per month?

The monthly cost of a $500,000 mortgage can vary widely based on your quoted interest rate and loan term. Assuming a 6.00% APR and 30-year term, a $500,000 mortgage would cost you a $2,998 monthly payment, without factoring in any taxes or insurance.

What credit score is required for a $500K mortgage?

A $500,000 mortgage would fall within the standard guidelines for conventional home loans in most cases. For a standard fixed-rate mortgage, Fannie Mae requires a minimum credit score of 620.

Photo credit: iStock/andresr

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

⁺Lock and Look program: Terms and conditions apply. Applies to conforming, FHA, and VA purchase loans only. Rate will lock for 91 calendar days at the time of pre-approval. An executed purchase contract is required within 60 days of your initial rate lock. If current market pricing improves by 0.25 percentage points or more from the original locked rate, you may request your loan officer to review your loan application to determine if you qualify for a one-time float down. SoFi reserves the right to change or terminate this offer at any time with or without notice to you.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

SOHL-Q325-009

A family opportunity mortgage is a loan for a residential property bought for a parent or an adult disabled child who could not qualify for financing on their own.

Under Fannie Mae guidelines, a principal residence can be purchased for a child or parent who is unable to work or who does not have sufficient income to qualify for a mortgage. The buyer will be considered the owner-occupant even though they will not live in the house.

This article will explain family opportunity mortgage guidelines and rules, how to find lenders, and more.

What Is a Family Opportunity Mortgage?

What was a formally titled program under Fannie Mae is now a conventional loan with expanded guidelines to allow owner-occupied financing under special circumstances.

A family opportunity mortgage may be used:

•   When parents or legal guardians of a disabled adult child want to provide housing for the child.

•   When children want to provide housing for parents who cannot qualify for a mortgage because they cannot work or their income is too low.

Buyers are able to obtain financing at the same interest rates and terms as a principal residence under these circumstances. They do not have to use second home or investment property requirements.

Recommended: How to Buy a Single-Family Home

How a Family Opportunity Mortgage Works

A family opportunity mortgage works just as a conventional mortgage for your primary residence does. Buyers must meet Fannie Mae’s eligibility and underwriting standards in order to qualify for the loan.

Lenders consider your debt-to-income (DTI) ratio, monthly debts as a percentage of your gross monthly income. Fannie Mae guidelines call for a maximum 45% DTI, or 50% with certain compensating factors.

Your income, though, must be high enough to cover the home mortgage loan for your primary residence and the residence you want to buy for your parent or dependent child. A credit score of at least 620 and steady employment will be required to qualify for the new mortgage as well.

Example of a Family Opportunity Mortgage

Here’s an example where you could use the family opportunity mortgage. Let’s say you have elderly parents who need more care, and you would like for them to move near you. Their retirement income isn’t enough to qualify for a mortgage in your area.

If you have enough income and a decent credit score, you may be able to buy a house for them. This is where a family opportunity mortgage may make sense.

You’ll turn to your lender to qualify you for owner financing. The term “family opportunity mortgage” is, technically, no longer in use, but the ability to qualify for an owner-occupied mortgage for a disabled adult child or elderly parent following Fannie Mae guidelines is the same. The lender can help you explore different types of mortgages that will meet Fannie Mae’s criteria.

You’ll need to choose between a fixed-rate loan and an adjustable-rate mortgage.

After settling on a mortgage product, you’ll submit all the necessary documents through your lender to apply for the mortgage.

After the loan closes, your parents will move into the house, and you’ll make the mortgage payments in your name.

Keep in mind the mortgage and the deed will be in your name unless you add your parents to the deed. There are advantages and disadvantages to structuring it this way, so be sure to do some research or consult a lawyer.

Recommended: Home Loan Help Center

Steps to Qualify for a Family Opportunity Mortgage

If you want to qualify for an owner-occupied mortgage for a disabled adult child or elderly parent, you’ll need to take the following steps:

•   Complete a mortgage application with your lender. You’ll need to add the amount of the additional mortgage to the one you have on your principal residence (if any) and still have enough income to qualify for financing. Take a look at this mortgage calculator tool if you want help coming up with an estimate.

•   Obtain preapproval. By providing a specific tentative loan amount, mortgage preapproval allows you to look for homes that fall within your budget.

•   Find a suitable property. The property does not have to be outside a specific distance from your own home (what’s known as “distance rules”); nor do you have to reside in the property to qualify for owner-occupied financing. The types of houses may be restricted to single-family homes, but it may also be up to your lender.

•   Provide your lender with all necessary documentation. This may include proof of the adult child’s disability or proof that a parent is unable to take on a mortgage.

•   Close on the loan. Sign all the paperwork, wire your down payment and closing costs to the appropriate entity, and take care of any final details.

A family opportunity loan is usually treated like conventional financing for an owner-occupied home. Some lenders may have stricter lending standards when it comes to the definition of an owner-occupied residence.

Advantages of a Family Opportunity Mortgage

Being able to provide housing for a loved one with owner-occupied financing comes with some advantages:

•   Lower down payment requirement. With a family opportunity mortgage, the minimum down payment is usually 5% (0% if borrowers qualify for a USDA or VA loan). If the property is bought as a second home or investment, the down payment requirement is usually 15% or more.

•   Interest rates are lower. Loan rates for second homes or investment properties run higher than owner-occupied residential mortgage rates.

•   Lower property taxes. When a property is classified as owner-occupied by your local taxing authority, you may qualify for an exemption that reduces property taxes owed.

•   Mortgage interest and property tax may be tax deductible. When you file your taxes, you may be able to claim the mortgage interest and property tax dedication for both properties. Consult a tax advisor about this deduction.

•   Borrowers are not required to occupy the property. With a family opportunity mortgage, you are not required to live on the property to qualify for owner-occupied financing.

Which Lenders Offer Family Opportunity Mortgages?

Since the official program with the name “Family Opportunity Mortgage” has been discontinued, you won’t be looking for a lender that offers this program when you are shopping for a mortgage. Instead, you’ll be looking for a lender that allows you to use Fannie Mae’s definition of an owner-occupant when buying a house for a parent or disabled adult child. Many lenders will offer this as it is a common conventional loan.

Tax Implications of a Family Opportunity Mortgage

The tax implications of owning a home with a type of family opportunity mortgage may be complex. It’s a good idea to consult a tax attorney or tax accountant for advice.

Dream Home Quiz

The Takeaway

Buying a home for a disabled adult child or an aging parent is possible if you meet Fannie Mae guidelines and have sufficient income. If you’re looking for the family opportunity mortgage, ask lenders if they allow owner-occupied conventional financing if you purchase a home for parents or a disabled adult child. You’ll save money while providing housing to a vulnerable adult.

FAQ

Has the Family Opportunity Mortgage program been discontinued?

The formal name “Family Opportunity Mortgage” has been discontinued, but Fannie Mae still allows conventional mortgages to be considered owner-occupied for buyers who are purchasing a home for a disabled adult child or for parents who cannot qualify for mortgages on their own.

Can I buy a home for someone who is not my family member?

You can buy a single-family home for someone who is not a family member, but the circumstances do not meet Fannie Mae family opportunity mortgage guidelines and will not qualify for owner-occupied financing.

Photo credit: iStock/Ridofranz

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

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Paying off your mortgage ahead of time might sound like an incredibly savvy thing to do — and in some cases, it is. But it’s not the right money move for everyone. And paying off a mortgage in just five years? It’s an aggressive strategy that may or may not be the smartest choice.

Benefits and Risks of Paying Off a Mortgage Early

Achieving homeownership is, well, an achievement. And since you’re here reading an article about paying a mortgage off early, you’re clearly an overachiever.

Paying off any kind of debt early usually seems advisable. But for most of us, our home is the single largest purchase we’ll ever make — and paying off a six-figure loan in only a few years could wreak havoc on the rest of your finances.

In addition, some mortgages come with a prepayment penalty, which means you could be on the line for additional fees that might eclipse whatever you’d stand to save in interest payments over time. (Mortgages tend to have lower interest rates than many other common types of debt anyway.)

That said, if you have the cash, paying off your home early can lead to substantial savings, not to mention helping you build home equity as quickly as possible.

Let’s take a closer look at the risks and benefits of paying off a mortgage early.

Benefits of Paying Off a Mortgage Early

The main benefit of paying off a mortgage early is getting out of debt. Even minimal interest is an expense it can be nice to avoid.

Additionally, paying off your home early means you’ll have 100% equity in your home, meaning you own its whole value, which can be a major boon to your net worth.


💡 Quick Tip: With SoFi, it takes just minutes to view your rate for a home loan online.

Risks of Paying Off a Mortgage Early

Paying off a mortgage early may come with risks, and not just prepayment penalties (which we’ll touch on again in a moment). In many instances, it can be a plain old bad financial move.

Depending on what your cash flow situation looks like, and what the interest rate on your mortgage is, you might stand to out-earn early payoff savings if you funnel the extra cash to your investment or retirement accounts instead. (You can use this mortgage calculator to see how much interest you stand to pay over the lifetime of your home loan — and then compare that to how much you might earn if you invested that money instead.)

Additionally, if you have other forms of high-interest debt, like revolving credit card balances, it’s almost always a better idea to focus your financial efforts on those pay-down projects instead.

“No matter what method works best for you, it’s important to cut spending as much as you can while you’re tackling your debts,” said Kendall Meade, a Certified Financial Planner at SoFi.

And if you have historically taken the home mortgage interest deduction on your taxes, it’s also worth talking with your tax advisor about what impact paying off your mortgage early will have on your deductions. (For 2025, the standard deduction for married couples filing jointly is $31,500. For single taxpayers and married people filing separately, it’s $15,750. In 2026, married couples have a standard deduction of $32,200 and single people and married people filing separately can deduct $16,100.)

To recap:

Watching Out for Prepayment Fees

One of the biggest risks of paying off a mortgage before its full term is up is the potential to run into prepayment penalties. Some mortgage lenders charge large fees to make up for the interest they’ll be missing out on.

Fortunately, avoiding prepayment penalties on home loans written after 2014 is easier: Legislation was passed to restrict lenders’ ability to charge those fees. But if your mortgage was written in 2013 or earlier — and even if not — it’s a good idea to read the fine print before you hit “submit” on your lump-sum payment, and ideally before you accept the contract at all.

Steps to Paying Off a Mortgage Early

You’ve assessed the risks and benefits and decided that paying off the mortgage early is the right move for you. Nice!

Now let’s take a look at how to get it done.

Pregame: Considering Repayment Goals When House Shopping

This option won’t work if you’ve already found and moved into a home, but if you’re still in the home-shopping portion of the journey, looking at inexpensive homes can be a great first step toward paying off your mortgage fast.

After all, if the home has a lower price tag, it’ll be easier to reach that goal in a shorter amount of time. Ideally, you want its value to appreciate, so you’ll still want to shop around before just choosing the lowest-priced house on the block.

Maybe you signed your home contract years ago and are just now considering getting serious about early mortgage repayment. Take heart! There are some easy steps to follow to make your mortgage disappear in five years or so.

1. Setting a Target Date

The first step: figuring out exactly when you want the mortgage paid off. Choosing your target date will make it easier to figure out how much additional money you need to send to your lender each month.

Five years is a pretty tight timeline for this kind of debt repayment process, but it could be doable depending on your earnings and commitment.

2. Making a Higher Down Payment

The higher your down payment, the less loan balance you’ll have to pay down, so if you can manage it, offer as much as you can right at the start. There are many assistance programs for down payments that might boost your offer and put you on track for paying down your mortgage early.

Also, realize that first-time homebuyers — who can be anyone who has not owned a principal residence in the past three years, and some others — often have access to down payment assistance.

3. Choosing a Shorter Home Loan Term

Obviously, if you want to pay your mortgage off in a shorter amount of time, you can consider choosing a shorter home loan term; most conventional mortgages are paid off over 30 years, though it’s possible to find loans with 15- or even 10-year terms. Just remember your monthly payment will be higher on a shorter-term loan.

4. Making Larger or More Frequent Payments

One of the most achievable ways for most borrowers to pay off a home loan early is to pay more than the monthly minimum, either by adding extra toward the principal in the monthly payment or by paying more than once per month.

Unless you’re due for a six-figure windfall, chipping away at the debt this way might be the smartest option. But how does one come up with the additional money to funnel toward that goal?

5. Spending Less on Other Things

As with most debt repayment strategies, chances are you’ll need to find other ways to cut back on spending in order to set aside more money to put toward the mortgage. This could be as small as bringing your lunch from home instead of getting takeout or as serious as choosing to give up a car. “Combat the urge to impulse spend by instituting a holding period on all purchases. Before hitting the buy button, wait 24 to 48 hours. After the holding period, come back to the shopping cart and reevaluate. In some cases, you might not even remember why you wanted it in the first place,” says Brian Walsh, CFP® and Head of Advice & Planning at SoFi.

6. Increasing Income

Another option, if there’s just nothing left to cut? Finding ways to increase your income, perhaps by starting a side hustle or asking for that long-overdue raise.


💡 Quick Tip: A Home Equity Line of Credit (HELOC) brokered by SoFi lets you access up to $500,000 of your home’s equity (up to 90%) to pay for, well, just about anything. It could be a smart way to consolidate debts or find the funds for a big home project.

How Much House Can You Afford Quiz

The Takeaway

Pay off a mortgage in five years? While paying off your home loan early could help you save money on interest, sometimes the money is better spent on other financial goals and projects. So it pays to take a close look at the numbers, just as you did when you got your mortgage in the first place.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

FAQ

Can I really pay off a mortgage in five years?

Whether or not you can pay off a mortgage in five years depends on the size of both your home loan and your income, as well as your other debts. It is certainly possible to pay off a loan in five years, but it might not be the best use of your money. If paying off your mortgage prevents you from paying off other higher-interest debt, or if you might earn more by investing the money than you would save on interest, paying off the mortgage may not be the smartest move.

Do I have to refinance if I want to pay off my mortgage in five years?

You don’t have to refinance in order to pay off your mortgage in five years. Borrowers can usually make extra lump-sum payments to the principal on their home loan to chip away at what they owe without refinancing.

Should you pay off your mortgage before you retire?

It might seem like a good idea to pay off your mortgage before retiring — after all, you’ll be on a fixed income and a loan payment can be a large monthly bill. But if you have limited savings, you might not want to tie it up by putting it toward your loan payoff. And if the money you would use to pay off your home loan might earn more if invested somewhat conservatively, you might be better off sticking with your loan for now.

Photo credit: iStock/fizkes

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

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