How this mortgage payoff calculator works
Enter your loan balance, interest rate, years remaining and the extra amount you plan to pay each month. The calculator shows how long the loan takes to pay off with the extra payment, the time you save, the current and new payment and the interest you save.
Why extra payments save so much
Interest is charged on the balance you still owe. An extra payment goes straight to principal, so every later month is charged interest on a smaller balance. Early in a loan most of each payment is interest, which is why extra payments made early save the most.
Worked example
On a $320,000 loan at 6.5% over 30 years, the regular payment is $2,023. Adding $200 a month pays the loan off in about 23 years and 5 months and saves about $105,000 in interest.
Ways to pay off a mortgage early
- Add a fixed extra amount to every payment.
- Make one extra full payment each year.
- Pay half the monthly amount every two weeks, which adds up to 13 full payments a year.
- Put windfalls such as tax refunds toward principal.
Tell your servicer to apply extra money to principal, and check your loan for a prepayment penalty first.
More examples: four extra payment amounts
This table uses the same $320,000 loan at 6.5% over 30 years, with the extra amount paid every month from the first payment.
| Extra per month | Paid off in | Time saved | Interest saved |
|---|---|---|---|
| $100 | 26 years 2 months | 3 years 10 months | $61,698 |
| $200 | 23 years 5 months | 6 years 7 months | $105,429 |
| $300 | 21 years 2 months | 8 years 10 months | $138,446 |
| $500 | 18 years | 12 years | $185,552 |
The first $100 does the most work. It saves about $61,700, while going from $200 to $300 saves about $33,000 more. Small, steady amounts are worth making even if you cannot afford a large one.
What the result means
The payoff date assumes you make the extra payment every month without a break. The interest saved is the difference between the total interest on the regular schedule and the total with extra payments. It does not account for what the same money could earn elsewhere or for any tax effect, so use it to compare payoff plans, not as a full financial plan.
What changes the result
- Extra amount: more each month means an earlier payoff, though each added dollar saves a little less than the one before.
- Interest rate: the higher your rate, the more interest each extra dollar saves.
- Remaining term: extra payments save the most when many years are left. Late in a loan most of each payment is already principal.
- Loan balance: the same extra payment is a bigger share of a small balance, so it shortens a small loan by more.
Common mistakes
- Expecting the required payment to drop. Extra payments shorten the loan, but the monthly amount due stays the same.
- Paying extra on the mortgage while carrying debt at a higher rate, such as a credit card balance.
- Sending every spare dollar to the loan and leaving no emergency savings. Money paid into a mortgage is hard to get back out.
- Entering the original loan amount and term instead of today’s balance and the years left.
Related calculators
See the full payment-by-payment split with the amortization calculator. If you pay mortgage insurance on a conventional loan, the PMI calculator shows how reaching 80% loan-to-value sooner cuts that cost. Use the mortgage calculator to price a new loan.
Frequently asked questions
Is it better to pay extra monthly or once a year?
Monthly is slightly better because the balance falls sooner. The difference is small if the yearly total is the same.
Should I pay off my mortgage or invest?
Paying down a mortgage gives a guaranteed return equal to your interest rate. Investing may return more or less. The right choice depends on your rate, your other debts and your emergency savings. This is not financial advice.
Does refinancing beat extra payments?
It can if the new rate is meaningfully lower. Compare both with the refinance calculator.
How much does an extra $100 a month save on a mortgage?
On the example $320,000 loan at 6.5% over 30 years, an extra $100 a month saves about $61,700 in interest and ends the loan 3 years and 10 months early. Enter your own numbers in the mortgage payoff calculator, because the saving depends on your balance, rate and remaining term.
Do extra payments lower my monthly payment?
No. On a fixed-rate loan the required payment stays the same. The extra money shortens the loan instead.
How many years does $500 extra a month take off a 30-year mortgage?
In the example above, 12 years. The $320,000 loan is paid off in 18 years instead of 30, and you save about $185,600 in interest.
Do extra payments help remove PMI?
They can. On a conventional loan you can ask your lender to remove PMI once the balance reaches 80% of the home’s original value, and extra principal gets you there sooner.