This mortgage payoff calculator helps evaluate how adding extra payments or bi-weekly payments can save on interest and shorten mortgage term.
Use this calculator if the term length of the remaining loan is known and there is information on the original loan – good for new loans or preexisting loans that have never been supplemented with any external payments.
The remaining balance is $372,217.43. By paying extra $500.00 per month starting now, the loan will be paid off in 17 years and 3 months. It is 7 years and 9 months earlier. This results in savings of $122,306 in interest.
| Interest savings $122,306 | Time savings 7 years and 9 months |
|---|---|
Original: $463,353 With payoff: $341,047 Pay 26% less on interest | Original: 25 yrs With payoff: 17 yrs, 3 mos Payoff 31% faster |
| Original | With payoff | |
|---|---|---|
| Monthly pay | $2,398.20 | $2,898.20 |
| Total payments | $863,352.76 | $741,046.55 |
| Total interest | $463,352.76 | $341,046.55 |
| Remaining payments | $719,460.63 | $597,154.42 |
| Remaining interest | $347,243.20 | $224,937.00 |
| Payoff in | 25 yrs | 17 yrs, 3 mos |
Use this calculator if the term length of the remaining loan is not known. The unpaid principal balance, interest rate, and monthly payment values can be found in the monthly or quarterly mortgage statement.
The remaining term of the loan is 24 years and 4 months. By paying extra $500.00 per month starting now, the loan will be paid off in 14 years and 4 months. It is 10 years earlier. This results in savings of $94,554.73 in interest.
| Interest savings $94,555 | Time savings 10 years |
|---|---|
Original: $207,677 With payoff: $113,123 Pay 46% less on interest | Original: 24 yrs, 4 mos With payoff: 14 yrs, 4 mos Payoff 41% faster |
| Original | With payoff | |
|---|---|---|
| Remaining term | 24 yrs, 4 mos | 14 yrs, 4 mos |
| Total payments | $437,677.36 | $343,122.63 |
| Total interest | $207,677.36 | $113,122.63 |
The Mortgage Payoff Calculator above compares your current mortgage plan with several ways of paying it off sooner: extra payments every month, an extra payment once a year, a single lump sum, switching to biweekly payments, or clearing the whole balance today. For each choice it shows the new payoff time, how many years and months you shave off, and how much interest you avoid paying. The amortization table lets you follow every single payment side by side.
Every regular mortgage payment is made of two pieces. The principal is the part that reduces what you still owe. The interest is what the lender charges for letting you use its money, and it is worked out each month as a percentage of the balance that is still outstanding.
Because interest is calculated on the remaining balance, the first years of a mortgage are dominated by interest. On a $400,000 loan at 6%, the first monthly payment of $2,398.20 contains $2,000 of interest and only $398.20 of principal. As the balance falls, the interest part shrinks and the principal part grows, until near the end almost the whole payment goes to principal. This pattern is called amortization.
That is also why paying extra works so well: every additional dollar goes straight to principal. A lower balance means less interest next month, which means more of the normal payment reaches principal too. The effect snowballs over the life of the loan.
This version assumes you have only ever made the regular payments. If you have already paid extra in the past, use the second calculator with the balance shown on your latest statement instead.
From these three values the calculator works out how long the loan will still run if you change nothing, then compares it with your chosen payoff plan.
You pay the full remaining balance now, for example from savings, an inheritance or the sale of another property. All future interest disappears. Before doing this, check that you keep an emergency fund and that your loan has no prepayment penalty.
You keep the normal payment and add money on top. You can combine three kinds of extra payment:
Always tell your lender that extra money should go toward principal. Some lenders otherwise hold it as an early payment for next month, which saves far less interest.
Instead of one full payment a month, you pay half of it every two weeks. A year has 52 weeks, so you make 26 half-payments – the same as 13 full monthly payments instead of 12. That one extra payment per year, plus balance reductions that happen a little earlier each month, can cut several years off a 30-year mortgage. Check that your lender really applies each half-payment when it arrives; some third-party "biweekly programs" charge fees and only pass the money on once a month.
Nothing changes. This option shows how long the loan will run and how much interest is left if you simply keep paying as scheduled, which is a useful baseline.
The regular monthly payment of a fixed-rate mortgage is:
M = P × i / (1 − (1 + i)−n)
where P is the original loan amount, i is the yearly rate divided by 12 (6% becomes 0.005) and n is the number of monthly payments (30 years = 360).
Each month the calculator then repeats three steps until the balance reaches zero:
The last payment is reduced so the balance ends exactly at zero. For biweekly payments the same steps run every two weeks with half the monthly payment and a rate of yearly rate ÷ 26. Interest saved is simply the total remaining interest of the normal plan minus the total remaining interest of the new plan.
A $400,000, 30-year loan at 6% has a payment of $2,398.20. After 5 years (25 years left) the balance is $372,217.43. Adding $500 a month, for a total of $2,898.20, pays the loan off in 17 years and 3 months – 7 years and 9 months early – and saves about $122,306 in interest. That is 26% less interest for 31% less time.
Your statement shows $230,000 owed, a $1,500 monthly payment and a 6% rate. With no change the loan runs another 24 years and 4 months and costs $207,677.36 in interest. Adding $500 a month brings that down to 14 years and 4 months and $113,122.63 of interest, a saving of $94,554.73.
Using the first example, suppose instead of monthly extras you pay a one-time $20,000 today. Because the money reduces the balance immediately, it avoids interest for the rest of the loan, roughly two and a half years shorter. Try it in the calculator by entering 0 per month and 20000 one time.
Choose Biweekly repayment with the default values. Paying $1,199.10 every two weeks instead of $2,398.20 monthly removes around four years from the remaining 25 and saves tens of thousands of dollars without a noticeably larger budget.
Paying extra gives a guaranteed, risk-free "return" equal to your mortgage rate, and owning your home outright brings real peace of mind. It is not always the best first step, though:
Other ways to cut the cost of a mortgage include refinancing to a lower rate or shorter term, rounding each payment up to the next $100, and putting any windfalls toward principal. Use the Mortgage Calculator to plan a new loan or the Amortization Calculator to explore any loan's schedule.
Because money you pay early stops earning interest for the lender for every remaining month of the loan. Over 20 or 25 years that adds up quickly.
Usually not. Most lenders keep the same payment and shorten the loan. If you want a lower payment instead, ask about "recasting" the loan after a large lump sum.
No. Enter only principal and interest. Escrow amounts pass through to the tax office and insurer and do not change the loan balance.
Twelve monthly extras of $100 save a little more than one $1,200 payment at year end, because each $100 starts reducing interest earlier. The difference is small, so choose whatever fits your budget.
Lenders may round each month's interest, count days instead of months, or apply payments on a different date. Results here are close estimates for planning.
It works for the current rate only. If the rate changes later, run the calculator again with the new rate and balance.
If the payment does not even cover the monthly interest, the loan can never be repaid and the calculator will tell you. Increase the payment or check the rate.