Creating a payoff letter is essential to any loan or mortgage repayment process. Our free templates and this guide can help you get started.A mortgage payoff letter can come in two forms. One form tells borrowers the remaining principal amount and interest they have to pay to close out the loan. Dreaming of a life without a mortgage? Here's how to decide if paying off your mortgage early is right for you. A payoff letter shows the remaining balance on your mortgage, including fees, interest, etc. Learn more about what a payoff quote is and how to request one.