Mortgage Payoff Calculator
Small extra payments on a mortgage go straight to principal, so every later month's interest is smaller. This calculator shows how much time and interest you save.
Results
Interest saved
$68,041.94
- New payoff time
- 20 years, 3 months
- Time saved
- 4 years, 9 months
- Regular monthly payment
- $2,025.62
- Interest on the original schedule
- $307,686
- Interest with extra payments
- $239,645
Paying an extra $200.00 a month clears the loan in 20 years, 3 months instead of 25 years, saving $68,041.94 in interest.
Interest: with extra payments vs saved
- Interest still paid$239,645 (77.9%)
- Interest saved$68,042 (22.1%)
Show the calculation steps
- Regular payment = $2,025.62 for 300 months; total interest $307,686.45.
- Each month the extra $200.00 goes straight to principal, so the balance falls faster and less interest is charged.
- The loan is cleared in 243 months; total interest $239,644.50; saved $68,041.94.
- Check that your lender applies extra payments to principal and does not charge a prepayment fee.
Why extra payments are so powerful
Interest is charged on the balance. An extra payment reduces the balance immediately and permanently, so you avoid all the interest that balance would have earned for the rest of the loan.
Before you pay extra
Check that your lender applies extra payments to principal and does not charge a prepayment penalty. Also consider whether you would earn more by investing the money, and keep an emergency fund first.
Formula
Each month: interest = balance × r; balance = balance − (payment + extra − interest)
Where:
- r
- = Monthly interest rate
- extra
- = Extra amount paid towards principal each month
Example calculation
$300,000 at 6.5% with 25 years left, paying $200 extra a month
Inputs
- Current Loan Balance
- $300,000
- Interest Rate
- 6.5 %
- Remaining Term
- 25 years
- Extra Payment per Month
- $200
- One-Time Extra Payment Now
- $0
Result
- Interest saved
- $68,041.94
- New payoff time
- 20 years, 3 months
- Time saved
- 4 years, 9 months
- Regular monthly payment
- $2,025.62
- Interest on the original schedule
- $307,686
- Interest with extra payments
- $239,645
Step-by-step
- Regular payment = $2,025.62 for 300 months; total interest $307,686.45.
- Each month the extra $200.00 goes straight to principal, so the balance falls faster and less interest is charged.
- The loan is cleared in 243 months; total interest $239,644.50; saved $68,041.94.
Important notes
- Assumes fixed-rate payments and that extra money is applied to principal each month.
Disclaimer: This calculator provides estimates for informational purposes and should not be considered financial advice. Actual figures from lenders, banks and investment products can differ because of fees, taxes, rounding rules and changing rates. Consult a qualified professional before making financial decisions.
Frequently asked questions
How much interest can I save with extra payments?
It depends on the rate and remaining term. The calculator shows the exact saving for your numbers.
Is it better to pay extra or invest?
If your investment return is above your mortgage rate after tax and risk, investing may pay more. Paying off debt is a guaranteed return equal to the interest rate.
Does a one-time payment help as much?
The earlier it is made, the more it saves. Use the one-time field to test it.
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