Mortgage Payoff Calculator
Loans & MortgagesPay extra and finish years early.
Balance, payment & extra
Use your current principal-and-interest payment. Exclude property tax, insurance and HOA dues.
Enter a mortgage balance greater than zero.
Check your mortgage details
Enter the remaining mortgage balance to calculate your payoff plan.
Know what this estimate is based on
- Jurisdiction
- General model; U.S.-specific rules are identified on the relevant tool
- Scope and limitations
- Educational estimate only. A lender may use different compounding, day-count, eligibility, tax, insurance, escrow, fee, or rounding rules.
- Source links checked
- Jul 30, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Enter your remaining mortgage balance, the interest rate, and the current monthly payment you already make.
- 02
Add the extra amount you could put toward principal each month in the extra payment field.
- 03
Read the time saved and interest saved, then compare the scheduled and with-extra rows in the payoff table.
Formula
This tool runs your mortgage forward month by month under two plans and compares them. With balance P, an annual rate r, and a monthly rate i = r ÷ 100 ÷ 12, each month the lender adds an interest charge of balance × i to what you owe. Your payment first covers that charge; whatever is left reduces the principal, so balance becomes balance + charge − payment. The 'as scheduled' plan repeats this using only your current monthly payment until the balance reaches zero, totalling every interest charge along the way. The 'with extra' plan repeats the exact same loop but with payment + extra each month, which sends the extra straight to principal and shrinks every future interest charge. Subtracting the two payoff times gives the time saved, and subtracting the two interest totals gives the interest saved. The tool also multiplies your extra by the number of months in the faster plan to show how much extra cash you contribute to earn that interest saving — a guaranteed return at your loan's rate. There are no advanced fields: the four inputs (balance, rate, current payment, extra payment) fully define the comparison. With the defaults — balance 3,000,000, rate 6%, payment 18,000, extra 5,000 — paying 18,000 alone takes 360 months (30 years) and 3,466,455 of interest, while paying 23,000 takes 212 months (17.7 years) and 1,869,988, saving 12.3 years and 1,596,467.
Example
What does an extra 5,000 a month actually buy you on a 3,000,000 mortgage? Take the defaults — a mortgage balance of 3,000,000, an interest rate of 6%, a current monthly payment of 18,000, and an extra monthly payment of 5,000 — and trace it through. The monthly rate is 6 ÷ 100 ÷ 12 = 0.005, so the first month's interest is 3,000,000 × 0.005 = 15,000. Under the scheduled plan, the 18,000 payment covers that 15,000 and puts 3,000 toward principal, leaving 2,997,000; the tool repeats this every month, and the balance reaches zero after exactly 360 months — 30 years. Adding up all 360 interest charges gives 3,466,455 of total interest. Now switch on the extra payment: you pay 18,000 + 5,000 = 23,000. In the first month that same 15,000 interest is charged, but now 8,000 reduces the principal instead of 3,000, leaving 2,992,000. Running this faster plan to zero takes 212 months — 17.7 years — and the interest charges add up to only 1,869,988. Comparing the two plans, you finish 360 − 212 = 148 months early, which is 12.3 years saved, and you pay 3,466,455 − 1,869,988 = 1,596,467 less in interest. Over those 17.7 years you contribute 5,000 × 212 = 1,060,000 of extra payments, and in return you keep 1,596,467 that would otherwise have gone to interest — a guaranteed, risk-free return earned at the loan's 6% rate. The comparison table makes it plain: as scheduled, 30 yrs and 3,466,455 of interest; with extra, 17.7 yrs and 1,869,988 of interest.
Definitions
- Mortgage balance
- The principal you still owe on the loan today, before this month's interest — the starting point both plans amortize down to zero (0 to 50,000,000).
- Interest rate
- The annual rate on the mortgage, divided by 12 to get the monthly rate applied to the outstanding balance each month (0.1% to 20%).
- Current monthly payment
- The scheduled payment you already make each month; the tool repays the balance using this alone to establish the baseline payoff time and interest (0 to 1,000,000).
- Extra monthly payment
- An optional amount added on top of the scheduled payment, applied entirely to principal so the loan clears earlier and accrues less interest (0 to 1,000,000).
- Time saved
- The headline result: the payoff time under the scheduled plan minus the payoff time with the extra payment, showing how many years earlier you finish.
Good to know
The outsized power of paying down principal early
The single most important idea behind this tool is that a mortgage charges interest on the balance that remains, and that balance is at its highest in the opening years. When you send extra money to principal early, you do not merely shave a little off the top of the loan — you erase the entire stream of interest that the eliminated principal would have generated month after month for the remaining decades of the term. That is why a modest, steady extra has such a disproportionate effect. In the default scenario, paying 18,000 a month clears the loan in exactly 30 years and costs 3,466,455 in interest. Adding 5,000 to make 23,000 clears it in 17.7 years and costs only 1,869,988 — a reduction of 1,596,467 in interest from a change that, month to month, feels small. The reason the saving dwarfs the cash you contribute is timing: in month one the interest charge is 3,000,000 × 0.005 = 15,000, so under the scheduled plan only 3,000 of your payment touches principal, while under the extra plan 8,000 does. Every extra dollar paid in that first month avoids interest in month two, which lowers the balance further, which avoids more interest in month three, and so the benefit cascades. The later you make the same payment, the fewer future charges remain for it to cancel, so its power steadily fades as the loan ages. This front-loaded structure is precisely why financial advice consistently urges borrowers who can overpay to start as soon as possible rather than waiting for a more convenient time. The calculator turns the abstract principle into concrete figures: it shows the exact months and interest a given extra removes, so the decision is no longer a vague good habit but a measured trade you can weigh.
Why the saving is a guaranteed, risk-free return
When you overpay a mortgage, the return you earn is not a hopeful projection — it is locked in by the arithmetic of the loan. Every dollar of principal you eliminate stops accruing interest at the loan's rate from that moment until the end of the term, so paying down a 6% mortgage is financially identical to earning a guaranteed 6% on the money you contribute, with no market risk and no chance of a bad year. The default numbers make the scale vivid. Over the 17.7-year payoff, you put in 5,000 × 212 = 1,060,000 of extra payments, and in exchange you keep 1,596,467 that would otherwise have flowed to the lender as interest. That is far more saved than contributed, because the saving accumulates across the whole remaining term rather than landing all at once. Unlike returns from investing, this one carries no volatility: it cannot fall in a downturn, it does not depend on timing the market, and in many places the interest you avoid is not taxed the way investment gains are. Those qualities make mortgage overpayment one of the few genuinely certain returns available to an ordinary household, and they raise the effective value of the saving relative to a risky investment promising the same headline percentage. The trade-off is liquidity: money put toward principal is buried in the home and is not easily retrieved without selling or borrowing against the property. So while the return is guaranteed, it is also illiquid, which is why the decision to overpay should always be weighed against keeping enough cash accessible. Treated correctly, though, the figure this tool reports is not a forecast but a contract — the interest you will, with certainty, no longer pay.
Recurring monthly extra versus a one-time windfall
There are two natural ways to attack a mortgage faster, and they suit different circumstances. The first is a recurring extra, a fixed amount added to every payment, which is what this calculator models with its extra field. A steady extra is predictable and easy to automate, and because it chips at the balance every single month, it keeps removing future interest continuously throughout the loan. The default 5,000 a month is exactly this kind of commitment, and it is what produces the 12.3 years and 1,596,467 of interest saved. The second approach is a lump sum — a bonus, an inheritance, a tax refund, the proceeds of selling something — applied to principal all at once. A windfall behaves on the same principle: whatever amount you direct to principal cancels the future interest on that amount for the rest of the term, and an early lump sum is especially potent because the balance it removes would otherwise have compounded for many years. To model a one-time payment with this tool, the cleanest method is to subtract it from the mortgage balance you enter, which reflects a payment made today; you can also approximate an ongoing reduction by feeding a representative amount into the extra field. In practice, many borrowers combine the two: a recurring extra they can sustain from regular income, topped up by occasional windfalls whenever they arrive. The recurring extra builds discipline and steady progress, while lump sums deliver sudden jumps in payoff. Neither is universally better — the right mix depends on how reliable your surplus income is and how often windfalls come your way. What matters is that both, applied to principal, shorten the loan and shrink the interest by the same underlying mechanism the calculator measures.
Making the servicer apply extra to principal
This calculator assumes something that is not automatic in the real world: that every extra dollar reduces your principal immediately. Mortgage servicers do not always treat overpayments that way, and getting this wrong quietly destroys the savings the tool projects. The most common pitfall is that a servicer books your overpayment as paying your future installments in advance — it rolls your due date forward so you may skip an upcoming month, yet the principal is not reduced early and the interest clock keeps ticking on the same balance. From the loan's point of view nothing has changed except which month the calendar says you are paid through. Another variation parks the extra in a suspense or escrow account until it accumulates to a full payment, again delaying or negating the principal reduction. To capture the result this tool shows, you must explicitly instruct the servicer, ideally in writing or through a clearly labelled online option, that any amount above the scheduled payment is to be applied to principal. Then verify it worked: after the next payment, check that the balance fell by the full extra amount and that the due date did not jump forward. If the statement shows the due date advanced or the balance only dropped by the scheduled principal portion, the extra was misapplied and you should correct it promptly. It is also worth asking how the servicer handles partial extra payments mid-cycle versus a single combined payment, since some only credit principal on full installments. These administrative details are unglamorous, but they are the difference between the 1,596,467 of interest saved in the default scenario and saving nothing at all. Treat the instruction-and-verification step as an essential part of any overpayment plan, not an afterthought, because the math only delivers if the principal genuinely drops.
When your loan charges a fee for paying it off faster
Before committing to an aggressive payoff, confirm that your mortgage does not punish you for paying it down faster. A prepayment penalty is a fee some loans charge when you repay more than a set amount ahead of schedule, designed to compensate the lender for the interest it expected to collect. Where such a penalty exists, it can blunt or even reverse the benefit this calculator shows, because the fee eats into the interest you saved. The forms these charges take vary widely, and the variation matters for your strategy. One loan might levy the penalty only inside an opening window — frequently the first two or three years — after which prepaying turns free. Another might bill you a flat percentage of whatever you repay early, or a stated number of months' worth of interest. A third might hand you an annual allowance, letting you prepay up to some share of the balance each year for nothing and charging only on the excess above that line. The single reliable way to know which structure governs your loan is to read the agreement or put the question to your servicer in plain terms. Where the penalty expires after a few years, a tidy workaround is to bank your intended extra in a separate account while the clause is live and then deliver it as one large principal payment the moment the window closes, harvesting nearly all the benefit without the charge. Where the penalty is permanent or steep, the whole calculation shifts, and your money may do better elsewhere or behind a refinance into a loan that carries no such clause. The headline saving here is computed as though overpaying is costless; a penalty is a real expense to net out of it first. Plenty of present-day mortgages impose no such fee whatsoever — but treat that as something to verify, not take on faith, since the check costs minutes and the mistake costs money.
The opportunity cost of paying down a low-rate mortgage
Paying off a mortgage faster is not the only thing you can do with spare money, and whether it is the best thing depends on what else that money could earn. This is the genuine opportunity-cost debate, and it deserves an honest accounting rather than a reflexive answer. The return from overpaying is certain and equal to your mortgage rate — 6% in the default case. The question is whether another use of the money offers more, after adjusting for risk and tax. Investing in a diversified portfolio might, over long horizons, exceed 6%, but those returns are uncertain, can be negative in any given year, and are often taxed, so a higher expected return does not automatically beat the guaranteed saving. The lower your mortgage rate, the stronger the case for investing instead, because the hurdle the investment must clear is lower; on a very low fixed rate, even cautious investments may win. The higher your rate, the more attractive guaranteed payoff becomes. One use of money almost always outranks overpaying a mortgage: capturing an employer retirement match, where each contributed dollar is matched instantly, an immediate return no payoff can rival. Similarly, clearing higher-rate debt — credit cards or personal loans charging far more than the mortgage — should come first, since the saving there is larger. So the disciplined ordering for many households is to secure any employer match, eliminate expensive debt, build liquid savings, and only then weigh mortgage overpayment against further investing. This tool quantifies one side of that comparison precisely — the certain interest you would save — so you can hold it up against a realistic, risk-adjusted estimate of what the same money might do elsewhere, and choose deliberately rather than by habit.
Keeping liquidity and an emergency fund first
However compelling the interest saving looks, money sent to your mortgage principal becomes deeply illiquid, and that has a real cost that the headline number does not capture. Once you overpay, that cash is locked in the home; you generally cannot get it back without selling the property or taking out new borrowing such as a home equity loan, often at an unfavourable moment and at additional cost. This matters because life delivers shocks — a lost job, a medical bill, an urgent repair — that demand accessible cash, and a fully paid-down mortgage does nothing to help when the problem is a sudden need for liquidity rather than a long-term balance. A household that pours every spare dollar into principal but holds no cash buffer can find itself forced to borrow expensively, or even to miss payments, precisely because it tied up the money that would have covered the emergency. The standard guidance, which applies squarely here, is to build an accessible emergency fund — commonly several months of essential expenses — before accelerating mortgage payoff, and to keep that buffer intact afterward. Overpaying should come from genuine surplus, money you are confident you will not need in the foreseeable future, not from funds that double as your safety net. There is also a subtler liquidity point: making an extra payment does not, in most cases, reduce next month's required payment, so overpaying does not buy you breathing room if your income later drops — the scheduled payment remains due in full until the loan is finished or formally recast. For that reason, prioritise the emergency fund, keep enough liquid savings to ride out setbacks, and direct only true surplus toward the principal. The saving this tool shows is real, but it is worth nothing if reaching it leaves you one unexpected bill away from a crisis.
Recasting versus refinancing when a lump sum lands
Adding extra to every payment is not the only route to a cheaper or shorter mortgage, and recasting is the one most borrowers have never heard of. A recast, or re-amortization, begins when you hand the lender a sizeable lump sum against principal; the lender then keeps your existing interest rate and original end date completely unchanged but spreads the now-smaller balance across the months that remain, so your required monthly payment drops. Notice what it does and does not do: it shrinks the obligation you must meet each month, yet it does not bring the finish line forward, which is the mirror image of what an aggressive overpayment achieves. That makes recasting the right tool when a windfall arrives and your goal is breathing room in the monthly budget rather than an early escape from the loan. Its appeal is its lightness — lenders that allow it usually charge only a modest processing fee, leave the rate and term alone, and do not put you through a fresh credit application. Refinancing is the heavier alternative: it tears up the current mortgage and writes a brand-new one, typically to capture a lower interest rate that trims every future interest charge. The price of that is a fresh round of closing costs and, often, a new full-length term, so the genuine test is whether the lifetime cost of the replacement loan, fees included, beats simply keeping and overpaying the loan you already hold. The three approaches even combine: refinance to a lower rate, then recast if a lump sum later appears, or just keep feeding extra principal into whichever loan you end up with. Match the choice to the aim — overpaying and refinancing both chase lower total interest and an earlier payoff, while recasting alone is about easing the monthly load. This tool models the plain extra-payment path, but if a better rate is on offer or a smaller required payment matters more to you than finishing early, price out a refinance or a recast before locking your surplus into extra principal.
Frequently asked questions
Why does an extra payment now save so much more than one later?
Interest is charged on whatever you still owe, and the balance is largest in the early years. An extra payment made now wipes out principal that would otherwise have generated interest every single month for the rest of the term, so its effect compounds across decades. The same extra paid near the end, when little balance remains, cancels only a handful of small interest charges, which is why the default 5,000 a month removes 1,596,467 of interest.
Is overpaying my mortgage really a guaranteed return?
Yes. Each extra payment removes future interest charged at your loan's rate, so paying down a 6% mortgage is mathematically equivalent to earning a risk-free 6% on that money. In the default scenario you contribute 1,060,000 of extra payments and avoid 1,596,467 of interest. Unlike an investment, this return is certain and not taxed as gains, though it is locked into your home rather than staying liquid.
Should I make sure the extra goes to principal?
Absolutely — this calculator assumes every extra dollar reduces principal, but some servicers instead log an overpayment as paying ahead on future installments, simply pushing your next due date later while the balance and its interest sit untouched. Tell the servicer in writing to apply extra amounts to principal, then check your next statement to confirm the balance dropped by the full extra and the due date did not move. If they will not, the savings shown here will not materialize.
What about a one-time windfall instead of a monthly extra?
A lump sum works the same way: any amount applied to principal removes the future interest on that amount for the rest of the term. To model a windfall here, you can subtract it from the mortgage balance you enter, or approximate a recurring schedule by spreading it across the extra payment field. A single early lump sum and a steady monthly extra both shorten the loan; the recurring version simply keeps removing interest every month rather than once.
Could investing the extra beat paying down the mortgage?
Possibly, if your expected after-tax investment return reliably exceeds your mortgage rate, but the mortgage payoff return is guaranteed while market returns are not. Many people also capture an employer retirement match first, since that is an instant return no overpayment can match, and clear higher-rate debt before touching a low-rate mortgage. Compare the certain 6% saving here against what you could realistically and safely earn elsewhere before deciding.