Mortgage Payoff Calculator Pay Off Your Mortgage Early With Extra Payments

About this tool

This free mortgage payoff calculator shows how much sooner you can pay off your mortgage, and how much interest you save, by adding extra payments: a little more each month, a lump sum once a year, or a one-time payment now. It can also work backwards: pick the year you want to be mortgage-free and see how much extra you need to pay each month.

Quick answer: Enter your balance, interest rate and years left, then add an extra monthly, yearly or one-time payment. For example, on a $250,000 balance at 6.5% with 25 years left, paying $200 extra a month clears the loan about 5 and a half years sooner and saves roughly $65,000 in interest.

How to use the mortgage payoff calculator

1. Step 1: enter the balance you still owe, the interest rate and the years (and months) left. Your latest mortgage statement has all three. If you know your monthly principal and interest payment, type it too and the calculator uses it.
2. Step 2, Option 1: add any mix of an extra monthly payment, an extra payment once a year (a bonus or tax refund) and a one-time payment now.
3. Step 2, Option 2: enter when you want to be mortgage-free, and see the extra monthly amount that gets you there.
4. Read the new payoff date, time saved and interest saved, and compare the balance year by year in the table.

Why extra payments save so much

Each month your lender charges interest on the balance still owed. In the early years most of your payment goes to that interest. An extra payment goes straight to the principal (as long as your lender applies it that way), so every later month is charged interest on a smaller balance. The saving snowballs: money paid early saves far more interest than the same money paid near the end.

Ways to pay off your mortgage early

• Round up: paying $1,750 instead of $1,688 is an easy habit that still cuts years off a long loan.
• One extra payment a year: putting a bonus or tax refund toward the principal once a year has a big effect over time.
• Biweekly payments: paying half your payment every two weeks adds up to 13 full payments a year instead of 12. Enter one twelfth of your payment as the extra monthly amount to see the effect, and ask your lender how it handles biweekly payments.
• Recast or refinance: a lump sum plus a recast lowers your payment; refinancing to a lower rate or shorter term changes the whole loan. Compare fees before you decide.

Before you pay extra

Check with your lender that extra payments go to the principal, not to next month’s payment, and whether there is any prepayment penalty. Many people also build an emergency fund and clear higher-interest debt such as credit cards first, because those usually cost more than a mortgage. This calculator covers principal and interest on a fixed-rate loan only; taxes, insurance, PMI and fees are not included. It is an estimate, not financial advice.

To work out a new loan payment, use the loan and EMI calculator. To plan where the extra money comes from, try the free budget planner.

FAQ

How much faster will I pay off my mortgage with $100 extra a month?

It depends on your balance, rate and term. On a typical 30-year loan, $100 a month usually takes a few years off. Type your own numbers above to see the exact effect.

Is it better to pay extra monthly or once a year?

Monthly saves slightly more, because the money reduces the balance sooner. The difference is small, so pick whichever you will actually keep up.

Does this work for home loans in India or the UK?

Yes. Choose your currency; the maths is the same for any fixed-rate loan with monthly payments. Floating-rate loans change over time, so treat the result as a guide.

Can I use it for a car loan or student loan?

Yes, any fixed-rate loan with monthly payments works the same way.