Mortgage payoff calculator

How extra payments shorten a mortgage

Each month your lender charges interest on the balance you still owe. Whatever is left of your payment after that interest goes to principal. Any extra you send skips the interest line and goes straight to principal, so next month's interest is figured on a smaller balance, a bit more of the regular payment goes to principal, and the effect compounds until the loan ends years early. The required payment itself comes from the standard amortization formula:

M = B × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)

B is your balance, r is the yearly rate divided by 12, and n is the number of payments left. If you know your payment instead of the time left, the calculator works backward: n = −ln(1 − B × r ÷ M) ÷ ln(1 + r). Here is the opening example, worked by hand:

1. 1

   Find the required payment

   A $360,000 balance at 7.24% with 30 years left: r = 0.0724 ÷ 12 = 0.0060333 and n = 360. (1.0060333)³⁶⁰ = 8.7187, so M = $360,000 × 0.0060333 × 8.7187 ÷ 7.7187 = $2,453.39.

2. 2

   Split the first payment

   Interest for month 1 is $360,000 × 0.0060333 = $2,172.00. Only $281.39 of the regular payment reaches principal. The $200 extra raises that to $481.39, so month 2 starts at $359,518.61 instead of $359,718.61.

3. 3

   Repeat until the balance is zero

   The calculator runs that loop month by month. With $200 extra, the last payment lands at month 284: 23 years and 8 months, or 6 years and 4 months early.

4. 4

   Compare the interest

   As scheduled, 360 payments carry $523,222 of interest. With the extra, interest drops to $392,944. You send $56,600 of extra principal (the last payment is smaller) and skip $130,278 of interest, about $2.30 for every extra dollar.

5. 5

   Set a target date

   To be done in 20 years, solve the formula for n = 240: the payment would be $2,843.17, so you need $389.78 extra a month.

These are the same numbers our mortgage calculator shows for a $400,000 home with 10% down, so you can move between the two pages without the math changing.

What each extra amount saves

A new $360,000 loan at 7.24% for 30 years, with the extra added every month from the first payment:

The first dollars do the most work, because they come off the balance when it is largest. The rate matters too. The same $200 a month on the same loan saves about $111,666 at 6.60%, $72,415 at 5% and $35,790 at 3%. If your rate is low, compare it with what a savings account pays before you speed up the mortgage.

Monthly, yearly, lump sum or biweekly?

Every method works the same way: more principal sooner. They differ in timing and habit.

• Monthly extra is the easiest to automate and saves a little more than the same money paid once a year, because it starts working sooner.
• Once a year suits a tax refund or bonus. The calculator applies it with every 12th payment.
• Biweekly means half a payment every two weeks. There are 52 weeks in a year, so you make 26 half-payments, or 13 full payments. Some servicers offer it free; some third-party programs charge setup or per-payment fees, and some hold your half-payments until a full one is collected. You can get almost the same result by adding one-twelfth of your payment ($204.45 here) every month.
• A lump sum from an inheritance or a home sale works best early in the loan. If you want a lower payment instead of an earlier payoff, ask your servicer about a recast: it re-figures the payment on the smaller balance over the same remaining term, usually for a fee.

Before you send extra money

• Check for a prepayment penalty. Most loans today have none, but some do, usually for paying off the whole loan in the first three to five years. Look at your Loan Estimate or note, or ask the servicer.
• Mark it as principal. Use the servicer's "additional principal" box or line. Otherwise extra money can be held as an early payment instead of reducing the balance. Check the next statement.
• Keep paying the full required amount. Extra principal does not let you skip a month on most loans; the required payment stays the same until the loan is gone.
• Keep cash on hand. Money in your home is hard to get back out without a sale, a refinance or a HELOC. Build an emergency fund first.
• Weigh the alternatives honestly. Paying extra earns your mortgage rate, risk-free. Paying off a credit card at 20% earns more. An employer retirement match is often better still. Investing may beat the mortgage rate over time, or may not; it carries risk the mortgage payoff does not. If a lower rate is available, a refinance can save more than extra payments, after closing costs.
• Drop PMI sooner. If you pay mortgage insurance, extra principal can bring the balance to 80% of the original value earlier, and you can ask to cancel it then. Our PMI calculator shows the date.

Sources and assumptions

• Default rate: Freddie Mac, Primary Mortgage Market Survey, week of October 29, 2026: 30-year fixed 7.24% (15-year fixed 6.60%). It is a national average for new loans; use the rate on your own statement.
• Math: standard fixed-rate amortization with monthly compounding. Interest is charged on the balance each month; extra payments go fully to principal. The last payment is trimmed to what is owed. Dates count from next month.
• Biweekly: modeled as 13 payments a year, with one-twelfth of a payment added each month. A true biweekly plan that credits each half-payment on arrival saves slightly more; a plan that holds half-payments saves about this much. Program fees are not included.
• Prepayment penalties: Consumer Financial Protection Bureau, What is a prepayment penalty? (reviewed September 11, 2024).
• PMI cancellation at 80% and 78% of original value: CFPB, When can I remove PMI from my loan? (reviewed August 28, 2026).
• Not included: property tax, insurance, PMI, escrow changes, adjustable-rate resets, recast fees, taxes on investment returns and the mortgage interest deduction.
• This calculator is an educational estimate, not financial, tax or legal advice. Ask your servicer for an official payoff quote, and speak with a licensed financial professional or a HUD-approved housing counselor. Rates checked October 29, 2026.

Common questions