Mortgage Payoff Calculator

How this mortgage payoff calculator works

Each mortgage payment covers the month's interest first, and the rest pays down the principal. Interest for a month is the balance times the annual rate divided by 12. Any extra money you pay goes straight to principal, so every later month is charged interest on a smaller balance. That is why extra payments shorten the loan and cut total interest.

The calculator builds the month-by-month schedule twice, once with your regular payment and once with your payoff plan, and compares the two. Choose the tab that matches what you know:

• I know the remaining term: enter the original loan amount, term, and rate. The calculator finds your regular payment with the standard amortization formula and your balance today from the time left on the loan. This works best for loans that have never had extra payments.
• I don't know the remaining term: enter the unpaid principal balance, the monthly principal and interest payment, and the rate from your mortgage statement. The calculator works out how long the loan has left.

Monthly payment = P × r ÷ (1 − (1 + r)^−n)

Here P is the loan amount, r the monthly rate (annual rate ÷ 12), and n the number of monthly payments; at a 0% rate the payment is simply P ÷ n. A $350,000, 30-year loan at 6.5% costs about $2,212.24 a month. With 26 years left, the balance is about $332,709. Paying an extra $300 a month pays it off in 19 years and 6 months instead of 26 years and saves about $102,591 in interest.

Early mortgage payoff: ways to pay off a mortgage early

Extra mortgage payments

Add a fixed amount every month, a lump sum at the end of each year (from a bonus or tax refund, for example), a one-time payment now, or any mix of the three. The extra mortgage payment calculator applies yearly extras with every 12th payment and a one-time extra with your next payment.

Biweekly mortgage payments

Paying half your monthly payment every two weeks adds up to 26 half payments a year, the same as 13 monthly payments instead of 12. The calculator models this as an extra half payment every six months. If you get paid every two weeks, this can be an easy way to pay off a mortgage faster. Check that your lender applies the payments as they arrive instead of holding them. Some servicers and third-party companies charge a fee to set up a biweekly plan; you can get the same result for free by making one extra monthly payment toward principal each year.

Paying off the whole balance

Paying the remaining balance at once ends the loan today and saves all the interest still to come. The payoff amount here is the principal balance; your lender's official payoff quote also includes interest accrued since your last payment and any fees.

What the result includes

• Payoff time with your plan, and how much sooner that is.
• Interest savings, also shown as the share of the original total interest you avoid.
• Total payments and total interest over the life of the loan, and, when part of the loan is already paid, the payments and interest still remaining.
• A balance chart and an amortization schedule from today on.

Frequently asked questions

How can I pay off my mortgage faster?

Put extra money toward principal. Even small amounts help because they reduce the balance that interest is charged on for the rest of the loan. Extra monthly payments, a yearly lump sum, biweekly payments, and refinancing to a shorter term all work.

Is it better to make extra payments monthly or once a year?

Paying the same total sooner saves more. $500 a month reduces the balance earlier than $6,000 at the end of the year, so it saves a bit more interest. A yearly lump sum is still a good fit for bonuses or tax refunds.

Do extra payments go toward principal?

They should, but ask your lender. Some apply extra money to future payments instead of principal unless you mark it as a principal-only payment.

Should I pay off my mortgage early or invest?

Paying off a mortgage early gives a guaranteed return equal to your interest rate. Investing may earn more but carries risk. Many people first build an emergency fund, take any employer retirement match, and pay off higher-interest debt.

Limitations

The results cover principal and interest only, not property taxes, insurance, PMI, or HOA dues. They assume a fixed interest rate and payments made on schedule. Some loans charge a prepayment penalty, a fee for paying off all or part of the loan early; read your loan documents before paying ahead. This calculator is an estimate, not financial advice.