Mortgage Payoff Calculator
Calculate how quickly you can pay off your mortgage with extra payments. See total interest savings.
Mortgage Payoff Calculator
How the Calculation Works
Formula: This calculator applies your monthly payment to accruing interest first, then to principal. It recalculates the remaining balance each month, factoring in extra payments you specify.
When you make extra payments toward principal, more of each subsequent payment goes toward principal rather than interest. This creates exponential acceleration toward payoff.
Key Inputs: Your remaining balance, current interest rate, regular monthly payment, and any extra payment amount. The calculator compounds interest monthly at your annual rate divided by 12.
Worked Example
Example: You have a $250,000 remaining balance at 6% interest, 25 years remaining, with a regular payment of $1,610/month.
- With no extra payments: Payoff in 25 years, total interest paid: ~$232,000
- With $200/month extra: Payoff in 18 years, total interest paid: ~$139,000 (saves ~$93,000)
- With $500/month extra: Payoff in 12 years, total interest paid: ~$77,000 (saves ~$155,000)
This example shows how extra payments reduce payoff time and interest cost. The specific impact depends on the loan amount, interest rate, term, and payment size.
How to Use This Calculator
Extra Payment Strategies:
- Biweekly Payments: Paying half your monthly payment every two weeks results in one extra payment per year, saving years and thousands in interest
- Lump Sum Payments: Making one large payment annually (from bonuses, tax refunds, etc.) can cut years off your mortgage
- Round Up: Rounding your payment to the nearest hundred dollars is a simple way to pay down principal faster
Important Note: Always verify with your lender that extra payments will be applied to principal, not held as a credit. Some mortgages have prepayment penalties—check your loan documents before making extra payments.
Frequently Asked Questions
How much interest can I save with extra payments?
Extra payments save significantly on interest because more of each payment goes to principal. Even $50-100 extra monthly can save tens of thousands over the loan's life. The earlier you start, the more you save.
Should I pay biweekly or monthly?
Biweekly payments result in 26 half-payments per year, equal to 13 full payments. This one extra payment annually accelerates payoff. It's a painless way to save years and substantial interest without drastically changing your budget.
Will my lender accept extra payments?
Most do, but always verify. Some mortgages have prepayment penalties (increasingly rare). Check your loan documents or contact your lender to confirm extra payments will be applied to principal.
How early can I pay off my mortgage?
You can pay off your mortgage at any time, but the amount of savings depends on how much extra you pay and how early you start. The calculator shows your exact payoff date based on your specific extra payment amount.