Mortgage Early Payoff Calculator
Paying a little extra on your mortgage each month can shave years off the loan and tens of thousands of dollars off the interest — but how much, exactly? Enter your balance, rate, remaining term and the extra you can afford, and see your new payoff date, the months saved and the interest saved. A one-time lump sum works the same way.
How much do I save by paying $200 extra on my mortgage?
Mortgage early payoff: Paying off a mortgage early means paying more than the scheduled monthly payment so the extra goes to principal, shrinking the balance — and every future month's interest — faster. On a $300,000 mortgage at 6.5% over 30 years, the payment is $1,896.20 a month and the total interest is $382,633.47. Adding $200 a month pays it off in 277 months — 23 years 1 month — with $279,184.67 of interest, saving $103,448.79 and 6 years 11 months. Source: CFPB — Owning a Home.
How to calculate a mortgage early payoff
- Work out the scheduled monthly payment with the amortization formula — monthly rate is APR ÷ 12, term in months.
- Each month, charge interest of balance × monthly rate, then subtract payment plus extra minus interest from the balance.
- Repeat month by month until the balance reaches zero and count the months — that is the new payoff time.
- Add up the interest paid with extra payments and subtract it from the interest on the original schedule to find the interest saved.
Source: CFPB — Owning a Home
What different extra payments do
Same loan, same rate — only the extra monthly payment changes. Lump sum is $0 in this table.
How this mortgage early payoff calculator works
Start with your current balance — not the original loan amount — plus your annual rate and the years left on the term. The calculator first works out your scheduled monthly payment with the standard amortization formula, the same one your servicer uses. Then it walks through the loan month by month: each month's interest is the balance times the monthly rate, and your scheduled payment plus any extra reduces the balance. Because the extra attacks principal directly, the balance falls faster, next month's interest is smaller, and more of every later payment goes to principal — the effect compounds. The simulation stops the month the balance reaches zero: that is your new payoff date. With no extra payment, the answer is simply your remaining term. It runs entirely in your browser: nothing you type is sent anywhere.
The early payoff formula
Each month's interest = balance × r
Principal paid = payment + extra − interest
Interest saved = total interest on the original schedule − total interest with extra payments
Here P is the balance, r is the annual rate divided by 12, and n is the remaining term in months. There is no shortcut for the new payoff date — the month-by-month walk is the calculation, because the balance changes every month.
Worked example
A $300,000 mortgage at 6.5% with 30 years left has a scheduled payment of $1,896.20 a month and total interest of $382,633.47 if nothing extra is ever paid. The first month's interest alone is $300,000 × 6.5% ÷ 12 = $1,625.00, so only $271.20 of that first $1,896.20 touches the balance. Pay $200 extra a month and the loan is gone in 277 months — 23 years 1 month — with total interest of $279,184.67. That saves $103,448.79 of interest and 6 years 11 months (83 months). Paying $100 extra instead finishes in 312 months and saves $60,994.79. A $10,000 lump sum on top of the $200 a month finishes it in 257 months and saves $135,672.85.
Why extra payments work so well
Early in a mortgage, most of each payment is interest, not principal. On the $300,000 example above, $1,625 of the first $1,896.20 is interest — so an extra $200 that month is not 10% more payment, it is 74% more principal repaid. Every extra dollar also kills the interest that dollar would have generated in every remaining month. The earlier the extra payment lands, the more months of interest it removes: a dollar of extra principal in year one saves far more than a dollar in year twenty. That is why a modest extra payment, kept up from the start, beats a large one made near the end.
Before you pay extra: check with your servicer
First, confirm your servicer applies extra payments to principal. Some apply them to future scheduled payments instead, which pulls your next due date forward without cutting the balance — you must usually ask, in writing, for principal-only application, and check the next statement to confirm it happened. Second, keep an emergency fund first: money sunk into a mortgage is hard to get back. Third, check for a prepayment penalty — rare on modern US mortgages. Finally, compare the return: paying extra on a 6.5% mortgage earns a guaranteed 6.5% — it beats savings accounts but may trail long-run investing.
Frequently asked questions
How much extra should I pay on my mortgage each month?
Whatever you can sustain — $100 a month on a $300,000 loan at 6.5% over 30 years finishes it 48 months early and saves $60,994.79. $200 a month saves $103,448.79 and 83 months. Start with an amount you will not need to stop, and raise it when your income rises.
Does paying extra on my mortgage actually save interest?
Yes, because interest is charged on the balance: every extra dollar of principal cuts every later month's interest. The $200-a-month example saves $103,448.79 — more than a quarter of the loan's original interest — by cutting 83 payments off the end.
Is it better to pay extra monthly or make a lump-sum payment?
A lump sum wins when the money is available: $10,000 now plus $200 a month saves $135,672.85, against $103,448.79 for the $200 alone, because it cuts the balance — and every month's interest — from day one. But keep your emergency fund intact first.
Will my servicer apply my extra payment to principal?
Not always automatically. Some servicers apply extra money to future scheduled payments, which moves your due date forward without cutting the balance or the interest. Ask in writing for principal-only application, and check your next statement: the balance should fall by the full extra amount.
Should I pay off my mortgage early or invest the money?
Paying extra on a 6.5% mortgage is a guaranteed 6.5% return — hard to beat with a savings account, but long-run investing has historically returned more, with risk. Usual order: emergency fund, clear higher-rate debt, capture any employer retirement match, then weigh extra payments against investing.
Sources
- CFPB — Owning a Home — Extra payments, prepayment and total interest over the term — and how to make sure extra payments are applied to principal.