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Finance Calc Kit
Mortgages

Mortgage Payoff Calculator

Calculate how much time and interest you save by making extra payments on your mortgage.

Mortgage details

$
%

Extra payments

$
$
$

Total interest saved

$76,270.80

Time saved: 6 yr 6 mo

Standard payoff

25 yr 1 mo

Accelerated payoff

18 yr 7 mo

Base payment

$1,842.26

Interest with extras

$176,407.95

Interest cost comparison

  • Interest saved$76,270.8030.2%
  • Remaining interest$176,407.9569.8%

Accelerated payoff schedule

YearStart balanceTotal paidExtra paidInterestEnd balance
Year 1$300,000.00$30,507.15+$8,400.00$16,295.04$285,787.89
Year 2$285,787.89$25,507.15+$3,400.00$15,493.36$275,774.10
Year 3$275,774.10$25,507.15+$3,400.00$14,928.51$265,195.46
Year 4$265,195.46$25,507.15+$3,400.00$14,331.79$254,020.09
Year 5$254,020.09$25,507.15+$3,400.00$13,701.41$242,214.35
Year 6$242,214.35$25,507.15+$3,400.00$13,035.47$229,742.68
Year 7$229,742.68$25,507.15+$3,400.00$12,331.97$216,567.50
Year 8$216,567.50$25,507.15+$3,400.00$11,588.79$202,649.14
Year 9$202,649.14$25,507.15+$3,400.00$10,803.68$187,945.67
Year 10$187,945.67$25,507.15+$3,400.00$9,974.29$172,412.81
Year 11$172,412.81$25,507.15+$3,400.00$9,098.12$156,003.78
Year 12$156,003.78$25,507.15+$3,400.00$8,172.52$138,669.15
Year 13$138,669.15$25,507.15+$3,400.00$7,194.71$120,356.71
Year 14$120,356.71$25,507.15+$3,400.00$6,161.74$101,011.30
Year 15$101,011.30$25,507.15+$3,400.00$5,070.51$80,574.67
Year 16$80,574.67$25,507.15+$3,400.00$3,917.72$58,985.24
Year 17$58,985.24$25,507.15+$3,400.00$2,699.91$36,178.00
Year 18$36,178.00$25,507.15+$3,400.00$1,413.40$12,084.25
Year 19$12,084.25$12,279.25+$1,400.00$195.00$0.00

How mortgage payoff savings are calculated

Month-by-month simulations compare your standard amortization schedule against extra principal payments.

  1. Calculate the standard monthly payment

    M=P×r(1+r)n(1+r)n−1M = P \times \frac{r(1+r)^n}{(1+r)^n - 1}

    For a $300,000.00 balance at 5.5% over 25 years and 0 months, the required monthly payment is $1,842.26.

  2. Simulate the standard payoff schedule

    Interestm=Balancem−1×r\text{Interest}_m = \text{Balance}_{m-1} \times r

    The standard plan pays $252,678.74 in total interest over 25 yr 1 mo.

  3. Apply extra monthly, annual, and one-time payments

    Principalm=M−Interestm+Extram\text{Principal}_m = M - \text{Interest}_m + \text{Extra}_m

    Extra payments include $200.00/mo, $1,000.00 each December, and a $5,000.00 lump sum in month 12.

  4. Measure interest and time saved

    Interest Saved=∑Istandard−∑Iaccelerated\text{Interest Saved} = \sum I_{\text{standard}} - \sum I_{\text{accelerated}}

    Accelerated payments retire the loan in 18 yr 7 mo, saving $76,270.80 in interest.

Report tool

Why extra mortgage payments save so much interest

Every dollar you send toward principal today reduces the balance that future interest charges are calculated on. Extra monthly payments, annual bonuses, and one-time lump sums can shorten your payoff timeline and cut thousands of dollars in cumulative interest.

This calculator simulates your standard amortization schedule against an accelerated plan with optional monthly, annual, and one-time prepayments. To size your base payment first, use the EMI calculator or the mortgage calculator. For biweekly and lump-sum strategies together, compare with the mortgage acceleration calculator. Before sending large prepayments, check whether your lender charges a fee with the mortgage penalty calculator. If you are refinancing instead of prepaying, find how long until closing costs pay back with the refinance break even calculator.

Standard monthly payment

Your required payment is based on the current balance, annual interest rate, and remaining term in years and months:

Where P is the remaining balance, r is the monthly interest rate, and n is the total number of months left on the loan.

Month-by-month payoff simulation

The tool runs two parallel schedules. The standard schedule applies only the required payment each month. The accelerated schedule adds your extra monthly amount, an annual extra payment every 12th month, and a one-time lump sum in the month you choose.

  1. Compute monthly interest on the opening balance.
  2. Subtract interest from the standard payment to find principal.
  3. Add any extra payments directly to principal reduction.
  4. Repeat until the balance reaches zero.

Worked example

Consider a $300,000 remaining balance at 5.5% with 25 years left. The standard monthly payment is about $1,842. Adding $200 per month, $1,000 each year, and a $5,000 lump sum in month 12 saves roughly $76,271 in interest and pays the loan off about 6 years and 6 months sooner than the standard schedule.

Tips before you prepay

  • Confirm with your servicer that extra amounts are applied to principal, not held for future installments.
  • Review your loan documents for prepayment penalties before sending large lump sums.
  • Compare guaranteed interest savings against other uses of cash, such as high-interest debt payoff or a fully funded emergency fund.

Frequently asked questions

How much can I save with extra mortgage payments?
Savings depend on your balance, rate, remaining term, and how much extra you pay. On a $300,000 balance at 5.5% with 25 years left, adding $200 per month plus annual and one-time extras can save tens of thousands in interest and shorten the loan by several years.
When is the annual extra payment applied?
The annual extra payment is added in month 12, month 24, and every 12th month thereafter until the loan is paid off.
Does this include escrow for taxes and insurance?
No. This tool models principal and interest only. For taxes, insurance, HOA, and PMI, use the mortgage calculator with taxes and insurance.
What is the difference between this and the mortgage acceleration calculator?
Both tools simulate prepayment savings. This calculator supports monthly, annual, and one-time extras with a year-by-year schedule. The mortgage acceleration calculator also models a biweekly payment boost.
Will my lender charge a prepayment penalty?
Most modern U.S. residential mortgages have no prepayment penalty, but you should verify your promissory note. Use the mortgage penalty calculator to estimate a potential fee on fixed or variable loans.
Are my inputs stored on a server?
No. All calculations run in your browser. Changing inputs updates the page URL so you can bookmark or share a scenario.

Resources and references

The formulas and methods in this calculator were checked against these independent sources.