Mortgage Payoff Calculator

See how extra payments shorten your payoff timeline and save interest.

Mortgage Payoff Calculator

See how extra payments shorten your payoff timeline and save interest.

Calculate

Loan Amount ($) *

Interest Rate (%) *

Original Loan Term (years) *

Years Already Paid

How many years have you been paying this mortgage?

Extra Payment Strategy

Extra Payment Amount ($)

Additional amount added to each monthly payment

Understanding Mortgage Payoff

Paying off your mortgage early can save you thousands of dollars in interest and give you financial freedom sooner. Our mortgage payoff calculator shows you exactly how much you can save with different extra payment strategies.

Whether you make extra monthly payments, annual lump sums, or a one-time payment, even small additional amounts can significantly reduce your loan term and total interest paid.

Payment Strategies

Extra Monthly Payments

Add a fixed amount to each monthly payment. This is the most consistent way to accelerate payoff and builds the habit of paying more.

Biweekly Payment Strategy

Pay half your monthly payment every two weeks. This results in 26 half-payments (13 full payments) per year instead of 12, effectively making one extra monthly payment annually.

Annual Extra Payment

Make one large extra payment per year, such as using your tax refund or work bonus. This is ideal if you have irregular income or receive annual bonuses.

One-Time Lump Sum

Apply a one-time payment from inheritance, savings, or other windfall. This immediately reduces your principal and saves interest over the remaining loan term.

Benefits of Early Payoff

💰

Save Thousands in Interest

Every extra dollar goes directly to principal, reducing the total interest you'll pay over the life of the loan.

🏠

Build Home Equity Faster

Paying down principal faster means you own more of your home sooner, giving you more equity for refinancing or selling.

😌

Peace of Mind

Owning your home outright eliminates one of life's biggest monthly expenses and provides financial security.

📈

Financial Freedom Sooner

Being mortgage-free lets you redirect that monthly payment toward retirement savings, investments, or other financial goals.

Smart Tips for Paying Off Your Mortgage

Check for Prepayment Penalties

Some mortgages charge fees for paying off early. Review your loan agreement or contact your lender to ensure there are no prepayment penalties before making extra payments.

Specify Principal-Only Payments

When making extra payments, always specify that the additional amount should go toward principal only. Otherwise, your lender might apply it to future interest payments.

Start Small and Increase Over Time

You don't need to make large extra payments to see benefits. Even an extra $50-100 per month can save thousands in interest. Start with what you can afford and increase as your income grows.

Consider Alternative Uses

If your mortgage rate is low (below 4%), consider whether you'd earn more by investing the extra money instead. Also prioritize high-interest debt (credit cards) and building a 3-6 month emergency fund first.

Frequently Asked Questions

Is it worth paying off my mortgage early?

It depends on your financial situation. If your mortgage rate is high (above 5-6%), paying it off early can save significant interest. However, if you have low-rate debt, you might benefit more from investing extra funds. Consider your complete financial picture, including emergency savings, retirement goals, and other debts.

How much extra should I pay each month?

Start with what fits your budget comfortably. Even $50-100 extra per month can shave years off your mortgage. A common rule is to add 10-20% to your monthly payment. Use this calculator to see how different amounts affect your payoff timeline and interest savings.

What is a prepayment penalty?

A prepayment penalty is a fee some lenders charge if you pay off your mortgage early or make large extra payments. This is less common now but still exists on some loans. Check your mortgage agreement or contact your lender to find out if you have one. Many penalties only apply in the first 3-5 years of the loan.

Should I pay off my mortgage or invest?

This depends on your mortgage interest rate and potential investment returns. If your rate is above 5-6%, paying off the mortgage is often better. If it's below 4%, investing might yield higher returns. Consider your risk tolerance, tax situation, and peace of mind. Many people split the difference, doing both.

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