Mortgage Payoff Calculator
A mortgage payoff calculator shows what happens when you pay more than the bank asks. Add a fixed amount to each monthly payment and the calculator runs two amortization schedules side by side — the original and the accelerated one — to reveal exactly how many months earlier the loan disappears and how much interest you keep in your pocket. Even a modest extra payment, applied every month, can erase years from a 30-year mortgage.
- Interest you still pay
- Interest saved
- Interest saved
- $97,618.12
- New payoff term
- 22 yr 1 mo
- Original interest
- $318,861.22
- New interest
- $221,243.10
Adding 200 to every payment clears the loan 7 years and 11 months early and saves about 97,618 in interest. The extra goes straight to principal, so it shrinks the balance interest is charged on for the entire rest of the loan.
Amortization schedule
| Year | Payment | Interest | Principal | Balance |
|---|---|---|---|---|
| 1 | $21,362.04 | $16,094.92 | $5,267.12 | $244,732.88 |
| 2 | $21,362.04 | $15,742.17 | $5,619.87 | $239,113.01 |
| 3 | $21,362.04 | $15,365.80 | $5,996.24 | $233,116.77 |
| 4 | $21,362.04 | $14,964.22 | $6,397.82 | $226,718.95 |
| 5 | $21,362.04 | $14,535.74 | $6,826.30 | $219,892.65 |
| 6 | $21,362.04 | $14,078.58 | $7,283.47 | $212,609.18 |
| 7 | $21,362.04 | $13,590.79 | $7,771.25 | $204,837.93 |
| 8 | $21,362.04 | $13,070.33 | $8,291.71 | $196,546.22 |
| 9 | $21,362.04 | $12,515.02 | $8,847.02 | $187,699.21 |
| 10 | $21,362.04 | $11,922.52 | $9,439.52 | $178,259.69 |
| 11 | $21,362.04 | $11,290.34 | $10,071.70 | $168,187.98 |
| 12 | $21,362.04 | $10,615.82 | $10,746.22 | $157,441.76 |
| 13 | $21,362.04 | $9,896.12 | $11,465.92 | $145,975.84 |
| 14 | $21,362.04 | $9,128.23 | $12,233.81 | $133,742.03 |
| 15 | $21,362.04 | $8,308.91 | $13,053.13 | $120,688.90 |
| 16 | $21,362.04 | $7,434.72 | $13,927.32 | $106,761.58 |
| 17 | $21,362.04 | $6,501.98 | $14,860.06 | $91,901.51 |
| 18 | $21,362.04 | $5,506.77 | $15,855.27 | $76,046.24 |
| 19 | $21,362.04 | $4,444.91 | $16,917.13 | $59,129.12 |
| 20 | $21,362.04 | $3,311.94 | $18,050.10 | $41,079.02 |
| 21 | $21,362.04 | $2,103.10 | $19,258.95 | $21,820.08 |
| 22 | $21,362.04 | $813.29 | $20,548.75 | $1,271.32 |
| 23 | $1,278.21 | $6.89 | $1,271.32 | $0.00 |
How it works
Your regular payment is split each month between interest on the outstanding balance and a chunk of principal. Any extra you add skips the interest line entirely and goes straight to principal. That matters because next month's interest is charged on the new, smaller balance — so the saving compounds. Every dollar of early principal repayment is a dollar that stops accruing interest for the entire remaining life of the loan.
The calculator builds the full accelerated schedule so you can see the loan reach zero ahead of time. The interest you avoid is the gap between what the original schedule would have cost and what the faster one actually costs. The earlier in the loan you start adding extra, the larger this gap grows, because the balance — and therefore the interest — is highest in the early years.
Each month the loan is charged interest = balance × (rate ÷ 12 ÷ 100); the scheduled payment plus your extra goes against that interest first, with the remainder cutting the balance. Because the extra reduces principal immediately, the balance — and the interest on it — falls faster every month, so the loan reaches zero before its original term. Time saved = original payoff months − new payoff months.
Worked example
On a 250,000 balance at 6.5% with 30 years (360 months) remaining, the normal schedule runs the full term and costs about 318,861 in interest. Add 200 to every payment and the loan is gone in roughly 265 months instead — about 95 months, or nearly 8 years, early. Total interest drops to around 221,243, a saving of about 97,618. That extra 200 a month earns you far more than most savings accounts ever would.
Things to watch out for
Confirm your lender applies extra payments to principal, not to future installments — some need you to specify this. Watch for prepayment penalties on certain loans. Note this calculator assumes you keep adding the extra every month for the life of the loan; a one-off lump sum behaves differently. If you want to compare regular extra payments against keeping the cash invested elsewhere, weigh the guaranteed interest saving here against the expected (but uncertain) return of the alternative.
Frequently asked questions
How does paying extra each month save so much interest?+
The extra goes entirely to principal, so it permanently lowers the balance that interest is charged on. That reduction carries forward every remaining month, which is why a small monthly addition can save tens of thousands over a long mortgage.
Is it better to pay extra monthly or save for a lump sum?+
Starting smaller extra payments sooner usually beats waiting to save a lump sum, because the saving depends on how early principal comes down. The most valuable extra payments are the earliest ones, when the balance is largest.
Will my lender definitely put the extra toward principal?+
Not automatically in every case. Some lenders apply unallocated extra money to the next installment instead of the principal. Tell your lender to apply it to principal, and check there is no prepayment penalty first.
Should I pay off the mortgage early or invest instead?+
Paying down the mortgage gives a guaranteed return equal to your interest rate. Investing might earn more but carries risk. If your mortgage rate is high, prepaying is a strong, risk-free choice; if it is low, investing may win over the long run.
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Disclaimer: This calculator is for educational and informational purposes only and provides estimates, not financial advice. Interest rates, taxes, fees, and local rules vary and change over time. Confirm figures with a qualified professional before making any financial decision.
Last reviewed: 2026-06-22