Mortgage Payoff Calculator
See how an extra monthly principal payment shortens your mortgage and how much total interest it saves. Enter your loan, rate, term, and the extra amount you'd add each month.
Extra-payment savings
Example: $320,000 at 6.5% for 30 years, +$200/mo → pay off 6 yr 7 mo sooner.
The outsized effect of a small extra payment
Take a $320,000 loan at 6.5% over 30 years. Adding just $200 a month to principal pays the loan off 6 yr 7 mo sooner and saves about $105,429 in interest — dropping the total interest from $408,142 to $302,714. The reason is compounding in reverse: every dollar of principal you remove early stops accruing interest for the rest of the loan. These figures are computed by the same tested engine as the calculator.
Earlier is worth far more than later
The same extra payment made in year 1 saves dramatically more than in year 20, because it has more remaining months to compound against. If you can only make extra payments for a while, make them as early in the loan as possible. A single well-timed lump sum early on can rival years of small extras made late.
Payoff versus other goals
Guaranteed interest savings are attractive, but weigh them against higher-interest debt (pay that first), an emergency fund, and retirement contributions with employer matching. Extra mortgage payments also reduce liquidity — the money is locked in home equity until you sell or borrow against it. Use this tool to quantify the payoff side of that decision.
Frequently asked questions
How do extra payments pay off a loan faster?
Any amount above your scheduled payment goes straight to principal. That shrinks the balance, so less interest accrues next month, so more of the following payment attacks principal — a compounding effect that pulls the payoff date forward and cuts total interest.
Why does a small extra payment save so much interest?
Because it removes interest on every month that follows. Paid early in the loan — when the balance and interest are highest — even a modest recurring extra payment can save tens of thousands over the life of a mortgage and shave years off the term.
Should I make extra payments or invest instead?
It depends on your mortgage rate versus your expected after-tax investment return, plus your risk tolerance and need for liquidity. Extra mortgage payments are a guaranteed return equal to your loan rate; investing may earn more but is not guaranteed. Many people do some of each.
Will my lender apply the extra to principal?
Usually only if you specify it. Note the extra amount as "apply to principal" and confirm there is no prepayment penalty. Check that your servicer does not simply advance your next due date instead of reducing the balance.
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.