Mortgage Payoff Calculator
See how much time and interest an extra monthly payment, a one-time lump sum, or switching to bi-weekly payments saves on your existing mortgage.
How to use this calculator
- 1Enter your current balance and rate — not the original loan amount, unless you have made no payments yet.
- 2Enter how many years are actually left on the loan.
- 3Pick a strategy and compare the time and interest saved against paying it off as scheduled.
How the calculation works
Interest saved = Interest(original schedule) − Interest(with extra payments)- Original schedule
- The loan paid exactly as scheduled, with no extra payments
- Extra payments
- Additional principal paid via one of the three strategies
Every strategy reduces the outstanding balance faster, which reduces the interest charged on every subsequent payment — the saving compounds because mortgage interest is calculated on the balance still owed.
A one-time lump sum made early saves more interest than the identical amount made later, because it has more remaining months to avoid interest on.
Worked example
$250,000 balance, 6.5%, 25 years left, $200 extra a month
- 1.The regular payment on $250,000 at 6.5% over 25 years is $1,688.02 a month.
- 2.Paying as scheduled costs $256,404.68 in interest over all 300 months.
- 3.Adding $200 a month clears the loan in 234 months and cuts interest to $191,477.12.
- 4.That is 66 months (5.5 years) earlier and $64,927.56 less interest.
Result: 5.5 years earlier, $64,927.56 less interest
Why any extra dollar is worth more than it looks
A mortgage charges interest only on the balance still outstanding, recalculated every payment. That single fact is what makes early payoff powerful: a dollar sent in above the scheduled payment reduces the balance immediately, which means it also erases every future month's interest charge on that dollar for as long as the loan would otherwise have run. Paid early enough in a 30-year loan, a single extra dollar can prevent several dollars of interest from ever being charged.
It also explains why the payoff calendar does not move in a straight line. Extra payments made in year one of a loan save far more interest than the same amount paid in year twenty-five, simply because there are more remaining months left for that dollar to have kept accruing interest against you.
Three ways to get there
Every acceleration strategy is really a variation on the same idea — paying more principal, sooner — but the mechanics differ enough that they suit different budgets and habits.
- Extra every month — a fixed amount added to the regular payment. This is the most predictable option and compounds the most over a long-running loan, since every single payment benefits.
- A one-time lump sum — directing a windfall — a bonus, tax refund, or inheritance — straight at the balance. It has no ongoing effect on your monthly budget, and the earlier in the loan it lands, the more interest it avoids.
- Switching to bi-weekly — paying half the monthly amount every two weeks instead of the full amount once a month. Because a year holds 52 weeks, this quietly produces 13 monthly-equivalent payments a year instead of 12, without ever feeling like a deliberate extra payment.
Before you send extra money to the mortgage
Paying down a mortgage faster is rarely the wrong move financially, but it is not always the best use of the next available dollar. A few things are worth checking first.
- An emergency fund — money paid into home equity is not liquid — you cannot easily get it back without selling or borrowing against the house. Most planners suggest a cash cushion of several months' expenses before aggressively overpaying a low-rate loan.
- An employer retirement match — if a workplace retirement plan matches contributions, that match is typically an immediate, guaranteed return that a mortgage overpayment cannot beat — it is usually worth capturing first.
- Higher-rate debt elsewhere — a mortgage is often the cheapest debt a household carries. Credit cards, personal loans and auto loans usually carry meaningfully higher rates, and paying those down first typically saves more overall.
- Prepayment penalties — these have become rare on standard mortgages, but some loans — particularly older ones or certain non-standard products — still charge a fee for paying off faster than scheduled. Check the loan documents before committing to a strategy.
What this assumes, and where it stops
Assumptions
- The rate and payment stay fixed for the remainder of the term — no refinancing or rate changes.
- Extra payments are applied entirely to principal with no fee.
Limitations
- Does not check for prepayment penalties, which some fixed-rate mortgages carry, particularly in the first few years.
- The bi-weekly comparison assumes a lender that applies each half-payment immediately — some servicers hold bi-weekly payments until a full monthly amount accrues, which delays the benefit.
Common questions
Why is bi-weekly better than making one extra payment a year myself?
It is not inherently better — 26 bi-weekly half-payments and 13 monthly payments produce the same result, one extra payment's worth of principal each year. Bi-weekly is popular because it happens automatically through payroll-aligned payments, so it does not rely on remembering to send an extra check.
Should I pay off my mortgage early, or invest the extra money instead?
It depends on your mortgage rate versus what you could realistically earn investing, and your tolerance for debt. Paying off a 6.5% mortgage is a guaranteed 6.5% return; investing is not guaranteed but has historically outperformed that over long periods. There is no universally correct answer — compare this calculator against the Investment Calculator for your specific numbers.
Formula and content last reviewed on .
Results are estimates for information only, not professional advice.
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