Mortgage Payoff Calculator
Enter your numbers. See exactly how much interest you save and how many years you shave off by paying extra each month. Updated in real time.
Your Numbers
How This Calculator Works
This calculator runs a full amortization schedule on your mortgage — the same math your lender uses. It takes your current balance, interest rate, and remaining term, then compares two scenarios: paying the required minimum each month versus adding extra principal.
The "interest saved" figure is the difference between total interest paid under each scenario. Because interest compounds against your outstanding balance, every dollar of extra principal you pay today saves you many dollars of interest later.
Why Extra Payments Work So Well
Mortgage interest is front-loaded. In the early years of a 30-year loan, roughly 70-80% of each monthly payment goes to interest, not principal. Extra payments bypass this — every extra dollar goes directly to principal, which in turn reduces the interest charged on every future payment.
This is why a seemingly small extra payment creates dramatic results. A $200/month addition represents just 9% extra payment per month, but it reduces total interest by 30-40% and cuts years off your term.
When Extra Payments Aren't the Right Move
Paying off your mortgage early isn't always optimal. Consider these alternatives first:
- High-interest debt. If you have credit card balances, auto loans, or student loans above 7-8%, pay those first.
- Employer 401(k) match. Free money. Always capture the full match before extra mortgage payments.
- Emergency fund. You need 3-6 months of expenses liquid before accelerating any debt payoff.
- Roth IRA space. Depending on your tax situation, filling Roth IRA contribution room may beat a 6-7% mortgage return.
Once those are handled, extra mortgage payments become one of the cleanest, most reliable financial wins available — a guaranteed return equal to your interest rate, with zero market risk.
How to Actually Make Extra Payments
Most lenders accept extra payments, but the mechanics matter:
- Write "apply to principal" in the memo line (or check the online payment option). Without this instruction, some servicers apply extra funds to next month's payment instead of reducing principal.
- Set up automatic bi-weekly payments if your lender allows it. You'll make 26 half-payments per year, which equals 13 full payments — one extra per year, automatically.
- Make sure there's no prepayment penalty on your loan. Most modern mortgages don't have one, but always check.
The 15-Year Mortgage Decision
Is a 15-year mortgage actually better than 30? We ran the numbers on 10 real scenarios. Get the full comparison by email.
Frequently Asked Questions
Is it better to pay extra on mortgage monthly or yearly?
Monthly wins, but only slightly. Paying $200 extra every month saves marginally more interest than paying $2,400 once a year, because each monthly payment reduces your principal sooner. However, the difference over a 30-year loan is typically only $1,000-$3,000. The behavioral benefit of automating monthly extra payments usually outweighs the math, so most financial planners recommend monthly.
Does paying extra on principal reduce monthly payment?
No. Extra principal payments shorten the loan term but don't reduce your required monthly payment. If you want to lower your monthly payment, you'd need to either refinance or request a loan recast (which some lenders offer after a lump-sum payment).
Should I pay off my mortgage early or invest?
Generally, invest if your mortgage rate is below 5% and you have at least a 20-year time horizon — the stock market's long-run average return of 7-10% beats your mortgage rate. For mortgage rates above 6%, the guaranteed return from payoff becomes competitive with expected market returns, especially on an after-tax basis. Current rates make extra mortgage payments more attractive than they've been in a decade.
What happens if I pay an extra $500 a month on my mortgage?
On a typical $300,000 mortgage at 6.5% for 30 years, an extra $500/month saves approximately $150,000 in interest and pays off the loan about 12 years early. Use the calculator above with your exact numbers — the results are often surprising even to homeowners who've been doing this for years.
Is there a downside to paying off a mortgage early?
Three potential downsides: (1) you lose the mortgage interest tax deduction, though this matters less since the 2017 tax law raised the standard deduction; (2) your money becomes illiquid — you can't easily pull equity back out without a refinance or HELOC; (3) you may miss higher returns from investing that money elsewhere. For most homeowners who already have emergency funds and are maxing retirement accounts, these downsides are manageable.