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Mortgage Payoff Calculator

Enter what you still owe and see how an extra monthly payment, a one-time lump sum, or a biweekly schedule moves your payoff date and shrinks your total interest.

Full mortgage calculator
Extra payment, lump sum, or biweeklyInstant results as you typeNo signup

Your Current Mortgage

$

What you still owe today — not the original loan amount.

%
Time Remaining
years
months

How Will You Pay It Down?

Each option is compared against sticking to your current payment.

$

Current Payoff

August 2056

$382,633 interest

New Payoff

September 2049

$279,185 interest

Extra monthly savings vs. your current plan

Interest Saved

$103,449

Time Saved

6y 11m

Current Plan vs. Extra monthly

MetricCurrentExtra monthly
Scheduled Payment (P&I)$1,896$2,096
Time to Payoff30 yr23y 1m
Payoff DateAugust 2056September 2049
Total Interest$382,633$279,185
Total Paid$682,633$579,185
You Save$103,449(6y 11m sooner)

Payoff Schedule

With your extra monthly applied to principal.

#DatePaymentPrincipalInterestBalance
1Sep 2026$2,096$471$1,625$299,529
2Oct 2026$2,096$474$1,622$299,055
3Nov 2026$2,096$476$1,620$298,579
4Dec 2026$2,096$479$1,617$298,100
5Jan 2027$2,096$481$1,615$297,618
6Feb 2027$2,096$484$1,612$297,134
7Mar 2027$2,096$487$1,609$296,647
8Apr 2027$2,096$489$1,607$296,158
9May 2027$2,096$492$1,604$295,666
10Jun 2027$2,096$495$1,602$295,171
11Jul 2027$2,096$497$1,599$294,674
12Aug 2027$2,096$500$1,596$294,174

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How Mortgage Payoff Works

Interest is charged on the balance, not the term. Each month your lender multiplies what you currently owe by one twelfth of your annual rate. Whatever you pay above that interest charge reduces the balance. Because next month's interest is calculated on the smaller balance, every extra dollar keeps paying you back for the entire remaining life of the loan.

Extra payments shorten the loan — they don't lower the bill. Your scheduled payment stays fixed. Paying extra means you reach a zero balance before the final scheduled month, so the loan simply ends early. If you want a lower monthly obligation instead, that requires a recast or a refinance, which is a different decision entirely.

Timing beats size. The same dollar saves more the earlier it is paid, because it has more months left to work against. This is why a modest amount paid consistently from today usually outperforms a larger sum you wait years to accumulate.

Before you start: tell your servicer in writing that extra funds are to be applied to principal only. Left unmarked, many servicers hold the money as a prepayment of next month's bill — you get a month off, not a shorter loan. Also confirm your loan has no prepayment penalty; they are uncommon on modern conforming mortgages but not extinct.

A Worked Example

Take a $300,000 remaining balance at 6.5% with 30 years left. The scheduled principal-and-interest payment is $1,896 a month, and staying on that schedule costs $382,633 in interest over the full term. Here is what three different approaches to the same loan produce:

Interest and time saved by payoff strategy on a $300,000 balance at 6.5% with 30 years remaining
StrategyInterest SavedTime Saved
Extra $200 a month$103,4496 yr 11 mo
Extra $300 a month$135,1159 yr 2 mo
One-time $10,000 today$53,6022 yr 9 mo
Biweekly payments ($948 every 2 weeks)$87,2565 yr 10 mo

The comparison worth sitting with is the first row against the third. An extra $200 a month takes over four years just to add up to $10,000 in payments — yet it saves roughly twice as much interest as handing over $10,000 today, because it keeps cutting the balance month after month rather than once.

When Paying Early Helps — And When It Doesn't

It helps most when your rate is high and your term is long. On a $250,000 balance at 7% with 25 years to run, an extra $150 a month saves about $58,696 in interest and ends the loan 4 years 6 months early. The same $150 against a 3% loan with eight years left barely moves the needle — there is little interest left to eliminate.

It rarely helps when something else costs more. Credit card debt at 22%, a car loan at 11%, or an unclaimed employer 401(k) match all beat a 6.5% guaranteed return. Extra principal is also illiquid: once paid, you cannot get it back without a refinance or a home equity loan. An emergency fund should come first.

One case people get wrong: paying extra to “cancel PMI sooner” is often worth more than the interest saved. If you are close to 20% equity, a relatively small lump sum can remove a monthly premium entirely — check your loan servicer's removal threshold before deciding where the money goes.

These figures cover principal and interest only. Your actual monthly bill also includes property taxes, homeowners insurance, and possibly PMI or HOA dues, which do not change when you pay down principal. Estimate the full payment with the mortgage calculator.

Frequently Asked Questions

What is the 2% rule for mortgage payoff?

The 2% rule is an informal guideline: each year, pay an extra 2% of your original loan balance toward principal. On a $300,000 mortgage that is $6,000 a year, or $500 a month. At 6.5% with 30 years remaining, that extra $500 a month clears the loan in about 17.5 years instead of 30. It is a rule of thumb, not a lender product — the number that matters is whatever extra amount you can sustain every month.

How do I pay off a 30 year mortgage in 5 years?

You have to raise the payment enough to retire the whole balance in 60 months. On a $300,000 balance at 6.5%, that means paying about $5,870 a month instead of $1,896 — roughly triple. For most households a 5-year payoff is only realistic after a large windfall, a home sale, or an unusually small remaining balance. If the full payment is out of reach, the calculator above shows what a smaller, sustainable increase actually buys you.

How much does an extra principal payment reduce my mortgage?

Every extra dollar goes straight to principal, so it stops accruing interest for the entire remaining life of the loan. On a $300,000 balance at 6.5% with 30 years left, a single one-time $1,000 payment made today saves about $5,903 in interest and pulls the payoff date forward by 3 months. The same $1,000 paid ten years from now saves far less, because it has fewer years left to compound against.

What is the formula for paying off a mortgage early?

There is no separate early-payoff formula. Start with the standard amortization payment, P = L × r / (1 − (1 + r)^−n), where L is the balance, r the monthly rate, and n the months remaining. Each month, interest equals the balance times r, and everything you pay above that reduces the balance. Adding extra principal simply makes the balance fall faster, so the loan ends before month n. That month-by-month simulation is exactly what the calculator on this page runs.

Is it better to pay extra monthly or make one lump sum payment?

A steady monthly amount almost always wins over a single lump sum of similar total value, because it reduces the balance repeatedly rather than once. On a $300,000 balance at 6.5% over 30 years, an extra $200 a month saves about $103,449 in interest, while a single $10,000 payment today saves about $53,602 — even though the monthly plan takes years to add up to more than $10,000. If you receive a windfall, pay it as early as possible: timing matters more than size.

Should I pay off my mortgage early or invest the money?

Paying extra principal is a guaranteed, risk-free return equal to your mortgage rate. Investing may return more, but not with certainty. A common order of operations: capture any employer 401(k) match first, clear higher-rate debt such as credit cards, build an emergency fund, then decide between extra principal and taxable investing based on your rate and your appetite for risk. At a 6.5% mortgage rate the guaranteed return is competitive; at 3% it usually is not.

Related Calculators

For the reasoning behind each approach rather than the numbers, read mortgage payoff strategies and mortgage amortization explained.

Mortgage Payoff Calculator: Extra Payments | FinWiser