I am purchasing a home for $180,000 (with a down payment of $50,000). The loan is for $130,000 (30 year conventional fixed rate

Most mortgages contain a due-on-sale clause requiring that the unpaid balance of principal and accrued interest plus some charges be paid at closing on the sale. The higher figure you mention may be the total interest if the mortgage is carried to maturity but it is not the amouint you would pay at closing on the sale after 5 years because it would not be fully owed yet.

Unless you have a pre-payment penalty, you will only have to pay the principal balance plus accrued interest owed up to the date of sale. This should be less than the initial principal balance of the loan because you should have paid the balance down somewhat in making your monthly payment, notwithstanding the fact that the first payments on a new loan are mostly interest.

Is the $240,000.00 figure from the truth-in-lending disclosure? If so, that figure is just letting you know what you will end up paying if the loan goes the full term of the loan (i.e. 30 years for a 30 year loan). If you make any additonal payments or miss a payment, that figure becomes inaccurate. If you pay off the loan early, you would only pay interest to the date of the pay off, so the amount you would owe would be the principle balance outstanding at the time of payoff (settlement of the sale), plus accrued interest on that amount. You would also be responsible for any pre-payment fees, if applicable.

Many (if not most) jurisdictions outlaw prepayment penalties on home mortgage notes. So what you will owe will depend on how much you have paid off at the time. Loans are amortized (allocated among payments over time) so the early payments are applied mostly to interest, because what is owed on principal at that moment is greater than what will be owed as you begin paying it down. This isn't greedy on the bank's part; it's merely a mathematical representation of what you owe and when you owe it. Later in the progress of the loan history, the "same" payment will be allocated less to interest and more to principal, and the payments at the tail end of the loan will be almost all principal. This style of amortization means that as of any timely payment, you will stay current and paid up on any interest due. If you become late, the accuracy of the amortization schedule may take a powder, but the idea of it will not. It still operates in the same manner. A very quick and reliable way to answer this question is to call your mortgage loan officer and ask for a printout of an amortization schedule. They should be quite willing to print one out on the spot for you. It will tell you, assuming timely payment of every installment, the amount of principal due at any time. If you anticipate a final payoff between scheduled dates on the amortization, the quick and reliable way to get the precise number is, as the date approaches, to request a payoff amount as of a date certain that you pick and then ask what the "per diem" is. A per diem (Latin for "by the day") is simply a dollar cost of the interest on the remaining unpaid principal, by the day from whatever payoff day they give you. So you can count the calendar days following a stated payoff day and add that amount for every day to arrive at an accurate payoff amount on your preferred day. Now here's something to make you a savvier borrower: While you're asking for an amortization schedule, consider asking for one more thing. Usually payments are made on a monthly basis. But often at the outset of a loan process, before the bank has closed on the loan, the loan officer will be willing to consider biweekly payments. Whether that is a good idea or a bad one for you depends on how well you can manage your money and maybe how often you get paid. But here's the thing. If you can make payments every two weeks, you will save a bundle. I'm talking about cutting the monthly payment in half, more or less, and paying every other week. You do not pay any more per month this way. But look at the final interest numbers on the two amortization schedules. You can save five figures on interest charges by just making the (1/2) payment every other week. Ask your loan officer to print out the two examples - monthly payments and biweekly payments. You'll be amazed.