How to use the Mortgage Payoff Calculator
- 1 Enter your current balance and interest rate.
- 2 Enter your regular monthly principal and interest payment.
- 3 Enter how much extra you could pay each month.
- 4 Read the interest saved and how much sooner the mortgage is paid off.
Worked example
$250,000 balance at 6.5%, paying $1,900 a month. As usual, it takes 231 months with about $188,697 of interest. Adding $200 a month clears it in 192 months, more than three years sooner, and saves about $36,275 in interest.
Features
Side-by-side
Time left and total interest with and without the extra payment.
Any extra amount
Try $50, $100 or $500 a month to find a comfortable figure.
Payment check
Warns if the payment does not cover the monthly interest.
When to use it
Becoming debt-free sooner
See your new payoff date with a little extra each month.
Using a raise
Put part of a pay rise toward the mortgage and see the effect.
Paying off versus investing
Compare the guaranteed interest saved with what you might earn investing.
Before retirement
Plan to clear the mortgage before you stop working.
Frequently asked questions
Do extra payments really save interest?
Yes. Extra money goes straight to principal, so less interest is charged every following month.
Is there a prepayment penalty?
Most standard US mortgages have none, but check your loan documents before paying extra.
Should I tell my lender the extra is for principal?
Yes. Mark extra payments as principal so the lender does not treat them as an early next payment.
Is a lump sum better than monthly extra?
Both reduce interest. A lump sum early in the loan saves the most, but steady monthly extra is easier for most budgets.
Does this include escrow?
No. Use only principal and interest; taxes and insurance do not affect the payoff date.
What about biweekly payments?
Paying half your monthly payment every two weeks makes 26 half payments, the same as 13 monthly payments a year. That one extra payment a year has a similar effect to adding about one twelfth of a payment each month.
Does paying extra lower my monthly payment?
No. On most mortgages the payment stays the same and the loan simply ends sooner. A recast, if your lender offers it, can lower the payment after a large lump sum.
Should I build savings first?
Usually yes. Keep an emergency fund and pay off higher-interest debt before putting extra money into a low-rate mortgage.
Where do I find my balance and rate?
Your monthly mortgage statement shows the unpaid principal balance, the interest rate and how the last payment was split between principal, interest and escrow.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Reviewed by ToolsUnlocked Team · Last updated