About the Mortgage Payoff Calculator
This mortgage payoff calculator shows what happens when you pay more than your required monthly payment. Enter your current balance, rate and the years left on the loan, then add an extra monthly amount, a one-time lump sum, or both. It compares your new payoff time and total interest with the schedule you are on today.
It is useful for homeowners deciding whether to put a raise, bonus or tax refund toward the mortgage, and for anyone who wants to be debt-free before retirement or before a child starts college. Because interest is charged on the remaining balance, every extra dollar of principal stops interest from accruing on that dollar for the rest of the loan — so extra payments made early have the biggest effect.
The calculator assumes your required payment stays the same (lenders do not lower it after prepayments unless you ask for a recast), that the rate is fixed, and that extra money is applied straight to principal. Check that your loan has no prepayment penalty.
With the default inputs, the interest saved is $85,737.48. Change any value above to recalculate instantly.
How to use the mortgage payoff calculator
- 1Find your current principal balance and rate on your latest mortgage statement.
- 2Enter the number of years left until the loan is scheduled to be paid off.
- 3Add the extra amount you could pay each month.
- 4Optionally enter a one-time lump sum, such as a bonus or tax refund.
- 5Compare the new payoff time and interest saved, and use the chart to see the gap grow.
Formula and method
Your required payment M is found with the standard amortization formula from the current balance B, the monthly rate r (annual rate ÷ 12) and the n months remaining. The calculator then runs the loan month by month twice: once with just M, and once with M plus your extra payment (after subtracting any lump sum from the starting balance).
Each month, interest is charged on the outstanding balance and the rest of the payment reduces principal. Because extra payments lower the balance sooner, less interest accrues in every later month, which is why the savings are much larger than the extra dollars themselves. The loan ends when the balance reaches zero.
- M
- Required monthly principal and interest payment
- B
- Current loan balance
- r
- Monthly interest rate (annual rate ÷ 12 ÷ 100)
- n
- Months remaining on the loan
Worked examples
$250k balance at 6.5%, 25 years left, +$300/month
The required payment on $250,000 over 25 years at 6.5% is $1,688.02, and the loan would cost about $256,405 in interest. Adding $300 a month pays it off in 212 months instead of 300 — 7 years 4 months sooner — and saves about $85,737 of interest.
One $20,000 lump sum, no monthly extra
Paying $20,000 toward principal today while keeping the same $1,688.02 payment finishes the loan in 248 months, 52 months early. Total interest falls to about $188,589, a saving of roughly $67,816.
$180k at 5% with 20 years left, +$500/month
The regular payment is $1,187.92. Paying $1,687.92 instead clears the balance in 142 months (11 years 10 months) rather than 240, and total interest drops from about $105,101 to $58,529.
Frequently asked questions
Is it better to pay extra monthly or make one lump sum?+
Dollar for dollar, money applied earlier saves more interest, so a lump sum today beats the same total spread over years. Regular monthly extras are easier to sustain, and combining both is the fastest route.
Will my monthly payment go down if I pay extra?+
No. On a standard fixed-rate mortgage your required payment stays the same and the loan simply ends sooner. To lower the payment after a large prepayment, ask your lender about a mortgage recast.
How do I make sure extra payments go to principal?+
Mark the extra amount as "additional principal" when paying online or on the coupon, and check your next statement. Some servicers otherwise hold extra money as an early payment of next month’s installment.
Should I pay off my mortgage early or invest?+
Paying extra earns a guaranteed return equal to your mortgage rate. Investing may earn more over time but with risk. Most planners suggest first building an emergency fund, capturing any employer 401(k) match and clearing high-interest debt.
Are there prepayment penalties on mortgages?+
Most US mortgages today have none, and rules limit them on qualified mortgages. Check your note or Closing Disclosure for a "prepayment penalty" line before sending large extra payments.
How much does one extra payment a year save?+
One extra full payment a year (about 1/12 extra each month) cuts roughly 5½ to 6½ years off a new 30-year loan at rates of 6%–7%. Enter your payment ÷ 12 as the monthly extra to see your exact figure.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.