Mortgage Payoff Calculator: Pay Off Early & Save Interest
See how much sooner you can pay off your mortgage and how much interest you save by paying extra each month. Enter your balance, rate, remaining term and extra payment. Example: a $250,000 balance at 6.5% with 27 years left, paying an extra $200 a month, pays off about 6 years early and saves roughly $77,000 in interest.
Show steps
How to use the Mortgage Payoff Calculator
- Enter your current mortgage balance, interest rate and years remaining.
- Enter how much extra you can pay toward principal each month.
- Press Calculate to see the new payoff time and the interest you save.
Formula and method
Each month interest is balance × r and the remaining payment reduces principal. Extra payments go entirely to principal, so every later month accrues less interest. The calculator simulates the loan month by month until the balance reaches zero.
Frequently asked questions
Do extra payments really save that much?
Yes. Early extra payments save the most because they cut the balance that interest is calculated on for years to come.
Should I pay extra on the mortgage or invest?
If your mortgage rate is higher than the return you expect from investing after taxes, paying down the mortgage is a guaranteed return. This is a personal decision.
Do I need to tell my lender the extra is for principal?
Yes. Many servicers apply extra money to the next payment unless you specify principal-only. Check for prepayment penalties as well.
Sources
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