Mortgage Payoff Calculator: See Your Extra Payment Savings
See exactly how much interest you save and how many months you cut from your mortgage by making extra payments. Supports extra monthly, extra annual, and one-time lump-sum payments.
Mortgage payoff accelerates when extra payments reduce the principal balance directly, causing each subsequent standard payment to allocate more toward principal and less toward interest. The amortization formula is M = P × [r(1+r)^n] / [(1+r)^n − 1] for the baseline; extra-payment simulation recalculates the remaining balance month-by-month, applying any additional payment directly to principal each period.
Interest saved = total interest under the original schedule minus total interest under the accelerated schedule. Months saved = original term minus actual payoff month. Under OBBB §70108, the $750,000 acquisition-debt cap on mortgage interest deductibility is permanent — factor in deduction loss when planning payoff for large balances.
Worked example: $300,000 loan at 6.5%, 30-year term, $1,896/month standard payment. Adding $100/month extra: balance recalculates each month. Result: payoff in 319 months instead of 360 — saves 41 months (3.4 years) and $26,490 in interest.
How it's calculated
How to use this calculator
- Enter your current loan balance, not your original loan amount (your current remaining principal).
- Enter your interest rate and remaining term (years remaining, not original term).
- Enter extra payment amount — monthly, annual, or one-time lump sum.
- Results show interest saved, months saved, payoff date, and side-by-side comparison with no extra payments.
Formula and assumptions
// Standard payment (amortization formula) M = P × [r(1+r)^n] / [(1+r)^n − 1] where r = annualRate / 12, n = months remaining // Monthly simulation with extra payment for each month: interestCharge = balance × r principalPaid = M - interestCharge + extraMonthly balance -= principalPaid if month == extraAnnualMonth: balance -= extraAnnual if month == 1: balance -= lumpSum stop when balance ≤ 0 → payoffMonth interestSaved = originalTotalInterest - newTotalInterest monthsSaved = originalTerm - payoffMonth
- Fixed rate
- Rate stays constant; ARM loans need periodic recalculation
- Extra → principal
- All extra payments applied directly to principal
- No prepayment penalty
- Many mortgages have none; verify with your servicer
Worked example
$300K balance, 6.5% rate, 30-year term, $100/month extra
Extra $100/month impact at three loan balances
The table shows how $100/month in extra principal payments affects three different loan balances at 6.5% interest for 30-year terms. Interest savings are disproportionately large for higher balances because more of each early payment goes to interest. Per standard amortization formula.
| Loan balance | Standard pmt | Months saved | Interest saved |
|---|---|---|---|
| $200,000 | $1,264 / mo | 38 months | $17,660 |
| $300,000 | $1,896 / mo | 41 months | $26,490 |
| $500,000 | $3,160 / mo | 44 months | $44,150 |
The $100/month extra payment saves roughly 3–4 years across all loan sizes. The interest savings scale with balance because the principal balance compounds longer on larger loans.
Limitations
- Assumes all extra payments are applied to principal — verify with your mortgage servicer.
- Prepayment penalties may apply on some loans (check your loan agreement).
- Does not account for lost investment returns on the extra payment amount.
- Educational estimate only — consult a licensed mortgage professional for your situation.
Frequently asked questions
Extra mortgage payments reduce your principal faster through compounding: less interest accrues each month, so more of each payment goes to principal. Adding $100/month to a $300,000 loan at 6.5% saves 41 months and $26,490 in interest. Always designate extra payments as 'principal reduction' — not future scheduled payments.
Recent updates
- May 2026Initial launch. Month-by-month amortization simulation with extra monthly, extra annual, and lump-sum payment modes.