Mortgage Payoff Calculator
See how extra payments can accelerate your mortgage payoff.
The Mortgage Payoff Calculator shows how extra payments accelerate your payoff timeline and reduce total interest paid. See the dramatic impact of even small additional contributions, and plan a strategy to become debt-free faster.
Examples
Extra $200/month
Annual Bonus Payment
Frequently Asked Questions
How do extra payments save money?
Should I pay extra or invest?
Are there prepayment penalties?
Quick Tips
- •Even small extra payments each month can save thousands in interest.
- •Bi-weekly payments (26 half-payments per year) effectively add one extra payment per year.
- •Check your lender for prepayment penalties before making extra payments.
The Mortgage Payoff Calculator shows how extra payments accelerate your payoff timeline and reduce total interest paid. See the dramatic impact of even small additional contributions, and plan a strategy to become debt-free faster.
How to Use This Calculator
Enter your current mortgage balance, interest rate, and monthly payment. Optionally add extra monthly payments, annual lump sums, or a one-time payment. Click Calculate to see your new payoff date, interest saved, and time saved compared to the standard schedule.
Understanding the Formula
Monthly Interest = Balance * (Annual Rate / 12). Principal = Payment - Interest. Extra payments reduce the principal directly, lowering future interest charges.
Examples
Extra $200/month
On a $250,000 mortgage at 6.5%, adding $200/month to your payment can save over $60,000 in interest and shave 6+ years off a 30-year loan.
Annual Bonus Payment
Applying a $5,000 annual bonus to your mortgage each year can significantly reduce the payoff timeline and total interest paid.
Frequently Asked Questions
How do extra payments save money?
Extra payments reduce the principal balance, so less interest accrues each month. This snowball effect shortens the loan and cuts total interest paid.
Should I pay extra or invest?
Compare your mortgage rate to expected investment returns after tax. If your mortgage rate is higher, extra payments offer a guaranteed return.
Are there prepayment penalties?
Most conventional mortgages do not have prepayment penalties, but always check your loan agreement or contact your lender.
Assumptions & Limitations
- Interest rate remains fixed; variable-rate mortgages will produce different results.
- Extra payments are applied directly to principal with no prepayment penalties.
- No loans are modified (refinancing, deferments) during payoff period.
- No missed payments or payment delays occur.
- Lender applies extra payments correctly to principal (verify with your lender).