Mortgage Payoff Calculator

The outsized effect of a small extra payment

Take the fictional loan behind the example above the form: $320,000 at 6.5% over 30 years, with $200 a month added to principal. The scheduled principal-and-interest payment is $2,022.62 either way. Without the extra, the schedule runs the full 360 months and records $408,142 of interest. With it, the balance reaches zero in month 281 — 6 yr 7 mo sooner — and total interest falls to $302,714, a saving of $105,429. The reason is compounding in reverse: every dollar of principal removed early stops accruing interest for the rest of the loan. Every figure on this page is computed at build time by the same tested engine that powers the calculator; the rates and amounts are illustrative inputs, not quotes.

What the engine computes, step by step

One engine function validates your four inputs, runs the steps below in order, and returns a typed result — or an explicit, human-readable error. The interface only formats what comes back; it never does arithmetic of its own.

1. Check the extra. It must be positive. Left at zero, the engine refuses before any schedule runs, with its own message: "Enter an extra monthly payment greater than 0." Negative, non-numeric, or out-of-range inputs are refused the same way.
2. Solve the scheduled payment. The standard amortized-loan (PMT) formula with monthly compounding — the convention behind US mortgages and most consumer loans — turns the loan, the annual rate ÷ 12, and the term in months (360 here) into the one fixed payment that retires the balance exactly at the last scheduled month: $2,022.62.
3. Run the baseline schedule. Each month, interest is the outstanding balance × (annual rate ÷ 12); the rest of the fixed payment reduces the principal. The loop ends when the balance is a fraction of a cent from zero — after 360 months here. Because the schedule is computed one month at a time rather than from a closed-form total, extra payments and payoff dates are exact.
4. Run it again with the extra. Identical arithmetic, except that each month's principal reduction is the payment minus interest plus the extra, and the final month pays only what remains. The balance reaches zero in month 281.
5. Subtract. Months saved is 360 − 281 = 79, shown as 6 yr 7 mo; interest saved is the baseline total interest minus the with-extra total, $105,429.

Months one and two, in numbers

In month one the balance is the entire $320,000, so interest is $320,000 × (6.5% ÷ 12) = $1,733.33 on both schedules. The baseline sends $289.28 of the $2,022.62 payment to principal, leaving $319,710.72; with the extra, $489.28 reaches principal, leaving $319,510.72 — $200 lower, exactly the extra. In month two the lower balance is charged $200 × (6.5% ÷ 12) = $1.08 less interest, and because the payment is unchanged that $1.08 also goes to principal. Small, but it recurs and grows in every remaining month of the 281-month schedule, and the baseline then goes on charging interest for another 6 yr 7 mo.

How the gap between the two balances grows

The engine returns both schedules summarised year by year. The table sets each schedule's ending balance at selected years against the extra paid by then ($200 × 12 × years); at any positive rate the gap between the balances is larger than the extra paid, and the excess is interest the with-extra schedule was never charged.

By the end of year 10 the with-extra balance is $33,681 lower: $24,000 of extra plus $9,681 of interest never charged. By year 20 the interest component, $50,084, exceeds the $48,000 of extra actually paid.

The same loan, different extras

Each row below is a separate run of the comparison on the same loan.

Doubling the extra does not double the saving: $100 a month saves $61,698, and $200 saves $105,429 — 1.7× as much. Each additional dollar removes interest from a balance the previous dollars have already shrunk, over a term they have already shortened. The engine reports each case; it does not rank them.

The same extra across the terms the form offers

The term sets the scheduled payment, and through it how much work is left for the extra. This table runs the loan and the same $200 extra over each term the form offers.

The shorter the term, the larger the payment and the smaller the effect of the same extra: over 15 years the payment is already $2,787.54, and $200 removes 1 yr 7 mo and $21,748 rather than 6 yr 7 mo and $105,429. The engine compares; whether a higher payment for fewer years fits a household's budget is not a question the arithmetic answers.

Starting the extra later

The engine applies the extra from the first month to the last; it has no input for an extra that starts later, stops, changes, or arrives as a lump sum. A later start can still be read from the engine. The baseline schedule reports $271,284 owing at the end of year 10; entered as the loan amount with the same 6.5% rate and the 20 years that remain, the engine returns the same $2,022.62 scheduled payment, and the $200 extra now saves 3 yr 3 mo and $40,185, against 6 yr 7 mo and $105,429 from month one. This is arithmetic, not a recommendation.

The reference figure inside the comparison

The methodology page names the figure the engine is validated against: a $200,000 loan at 6% over 30 years. The baseline half of this comparison is that same schedule function, so run on the reference loan with a fictional $100 extra it returns a baseline payment of $1,199.10 and baseline total interest of $231,676, matching the methodology page; the extra then saves 5 yr 5 mo and $49,138. If the copy and the code ever disagreed, the site would fail to build rather than publish inconsistent numbers.

How to read the result

• "Pay off … sooner" is the baseline payoff month count minus the with-extra count, in whole months: 6 yr 7 mo in Example A.
• Interest saved is the baseline total interest minus the with-extra total, to whole dollars: $105,429.
• New payoff time (was …) gives both payoff times: 23 yr 5 mo (was 30 yr).
• Monthly payment shows the scheduled payment, the extra as entered, and their sum: $2,022.62 + $200.00 = $2,222.62, principal and interest only.
• Total interest (was …) gives both totals: $302,714 (was $408,142).
• Copy result places a one-line summary on your clipboard.

Months saved and interest saved are different quantities: a fictional $24,000 loan at 0% over 4 years with $100 a month extra pays off 8 mo sooner and saves $0 of interest, because a 0% rate divides the principal evenly across the term and leaves no charges to remove. Money is shown to the cent, or to whole dollars for large totals, and time to the whole month; internally every calculation keeps the full precision of IEEE-754 double-precision arithmetic. Your lender's figure may differ by a few cents depending on their rounding and day-count conventions — the difference is presentational, not an error.

Where the calculator stops

The limits are the engine's. The calculators model fixed-rate, fully amortizing loans; they do not model adjustable-rate mortgages, interest-only periods, balloon payments, or negative amortization — the rate you enter is held fixed for every month, and the Fixed vs. Adjustable Rate guide describes the structure this engine does not price. The comparison is principal and interest only: property tax, insurance, PMI, HOA dues, and escrow are not part of either schedule; the Mortgage Calculator estimates those lines from the figures you enter. The extra is a fixed amount applied every month from the first — no lump sums, no later start, no missed payments, no recast — and prepayment penalties and the way a servicer applies surplus funds are outside the arithmetic. The Biweekly Payment Calculator models a payment-frequency change rather than a fixed extra. A correct calculation can still be the wrong calculation for your situation — choosing the right loan for a real-world decision is judgment we cannot automate.

Frequently asked questions

Not financial advice: a general educational estimate. Confirm there is no prepayment penalty and that extra funds are applied to principal. Values are processed locally in your browser and never transmitted. See the methodology page.