Mortgage Payoff Calculator
Use this mortgage payoff calculator to see what paying extra does to the loan you already have. Enter today's balance, your interest rate and the months left, then add an extra amount each month, a one-time lump sum, or both. You get the interest you save, how many months sooner the mortgage is paid off, and the balance year by year with and without the extra payments.
Updated
Results
- Months saved
- New payoff time (months)
- Current monthly paymentPrincipal and interest
- New monthly paymentShown when you choose to lower the payment
- Prepayment penaltyOn the lump sum
- Net savingInterest saved minus the penalty
- DiscountFace value minus the amount paid today
- Face value of the installments
| Year | Balance as scheduled | Balance with extra payments |
|---|
Results are estimates. See the methodology below.
How to use the calculator
- Current loan balance: the principal still owed, from your latest mortgage statement, not the original loan amount.
- Interest rate: the note rate on your loan (not the APR), per year. Switch to monthly only if you know the rate per month.
- Remaining term: the number of monthly payments left, for example 300 for 25 years.
- Extra payment and lump sum: extra principal you plan to add every month and any one-time payment you make now.
- After the lump sum: keep the same payment and finish sooner, or lower the payment over the months that remain.
- Advanced options: a prepayment penalty as a percentage of the lump sum, if your loan has one.
The prepay last installments mode values the final installments of a fixed-payment loan if paid today.
How the savings are calculated
The calculator first rebuilds your monthly principal and interest payment from the balance, rate and remaining months:
payment = B × r ÷ (1 − (1 + r)^−n)
where B is the balance, r the annual rate ÷ 12 and n the months left. It then runs the loan month by month twice: once as scheduled and once with your extra money. Each month, interest is charged on the remaining balance and everything above that interest reduces principal.
- Pay off sooner: the payment stays the same and the loan ends early.
- Lower the payment: after the lump sum, the payment is recalculated over the same remaining months. An extra monthly amount still shortens the term.
Interest saved is the difference in total interest between the two runs. A penalty, if you enter one, is applied to the lump sum only. The rate is assumed fixed. Taxes, insurance and escrow are left out.
Worked examples
All three use a $250,000 balance at 6.5% with 300 months (25 years) left. The scheduled payment is $1,688.02.
1. Extra every month
| Extra each month | Paid off in | Months sooner | Interest saved |
|---|---|---|---|
| $100 | 263 months | 37 | $37,671.20 |
| $140.67 (one extra payment a year) | 250 months | 50 | $49,728.25 |
| $200 | 234 months | 66 | $64,927.88 |
| $500 | 179 months | 121 | $115,668.35 |
With $200 extra, the balance after 10 years is $160,097.77 instead of $193,778.40, and after 15 years $87,952.25 instead of $148,661.20.
2. A $20,000 lump sum: pay off sooner or lower the payment?
Keeping the payment, the loan ends 52 months sooner and you save $67,815.99 in interest. If the payment is recalculated instead, it drops to $1,552.98 and the savings are $20,512.43, because you keep paying for all 300 months.
3. With a 2% prepayment penalty
A 2% penalty on the $20,000 costs $400, so the net saving is $67,415.99 if you pay off sooner and $20,112.43 if you lower the payment.
Prepayment penalties and other checks
Under Regulation Z (12 CFR 1026.43(g)), a covered mortgage may carry a prepayment penalty only if it is a qualified mortgage whose APR cannot increase and it is not a higher-priced loan. The penalty cannot apply after the first three years and is capped at 2% of the balance prepaid in the first two years and 1% in the third. The CFPB explains that penalties usually apply when you pay off the whole balance, for example by selling or refinancing, or a large amount at once, while small extra principal payments normally don't trigger them.
Fannie Mae suggests telling your lender that extra money should go to principal, and building an emergency fund of about six months of expenses before you prepay.
Frequently asked questions
Is a lump sum or extra monthly payments better?
The earlier money goes in, the more interest it saves. In the examples, $20,000 paid today saves $67,815.99, a little more than $200 a month for the rest of the loan ($64,927.88), even though the monthly plan adds far more than $20,000 over 19 years.
Will paying extra lower my monthly payment?
Not by itself. On a fixed-rate mortgage, extra principal shortens the loan while the required payment stays the same. A lower payment after a lump sum only happens if your servicer recalculates it; choose that option to see the new payment and the smaller savings.
Should I enter the original loan amount?
No. Enter today's principal balance and the payments left, from your statement. Using the original amount and term would assume you are starting the loan again and overstate the savings.
How do biweekly payments compare?
Paying half the payment every two weeks adds up to 26 half payments, or 13 full payments, a year. That is close to adding one-twelfth of the payment each month: in example 1, $140.67 extra pays off the loan 50 months sooner and saves $49,728.25. Make sure your servicer applies the money as it arrives rather than holding it.
Why does paying off sooner save more than lowering the payment?
When you keep the full payment, more of each payment goes to principal from the start, so the balance falls faster and interest is charged on a smaller amount for fewer months. Lowering the payment keeps the loan running for the full term.
Sources
Estimates for information only, not financial advice. Your servicer's figures may differ because of payment dates, rounding, escrow and the terms of your note.