Mortgage Payoff Calculator
$
6.00%
25 yrs
$
New Payoff Time17 yrs 9 mo
Time Saved7 yrs 3 mo
Interest Saved$76,416.83
Original Payoff Time25 yrs
original interest$233.2K
New Interest$156,809.22
Interest Saved$76,416.83
This mortgage payoff calculator shows how adding a fixed extra amount to each monthly payment shortens your loan and slashes the interest you pay. It first works out your normal payment from the current balance, rate, and remaining term, then re-runs the math with the extra amount applied straight to principal every month. The two scenarios are compared so you can see, in months saved and dollars of interest avoided, exactly what accelerating your payoff is worth.
Formula
n = −log(1 − rB / M) / log(1 + r)
- n
- Number of months to fully repay the balance
- B
- Current outstanding loan balance
- r
- Monthly interest rate = annual rate ÷ 12 ÷ 100
- M
- Total monthly payment (scheduled payment plus any extra)
How it works
- Enter your current loan balance, annual interest rate, and remaining term in years. The calculator derives the scheduled monthly payment that would retire the balance over that remaining term.
- Add the extra monthly amount you intend to pay. The tool computes the payoff time both at the scheduled payment and at the scheduled payment plus the extra, since every extra dollar goes directly to principal and reduces future interest.
- It reports the months saved, the interest saved, and the new versus original total interest, by simulating the declining balance under each payment plan until it is cleared.
Worked example
A $200,000 balance at a 6% annual rate with 25 years (300 months) remaining, paying an extra $200 every month.
- Scheduled payment for $200,000 over 25 years at 6% is $1,288.60, which pays off in 300 months.
- Adding $200 makes the payment $1,488.60, which clears the balance in 224 months.
- Original total interest is about $186,581; with the extra payment it falls to about $132,503.
The extra $200 a month pays the loan off 76 months early and saves roughly $54,078 in interest over the life of the loan.
Frequently asked questions
- How do extra payments save interest?
- Every extra dollar reduces the principal balance immediately, and since interest is charged on that balance, a smaller balance accrues less interest every month thereafter. The savings compound, which is why even modest extra payments can erase tens of thousands in interest.
- Is it better to pay extra monthly or make one lump sum?
- Both help, but consistent monthly extras start cutting the balance sooner and keep doing so every month. A lump sum delivers a one-time drop in balance; recurring extra payments generally remove more total interest over the remaining term.
- Should I check for prepayment penalties first?
- Yes. Some mortgages charge a fee for paying down principal early, especially in the first few years. Confirm your loan allows penalty-free extra payments before committing, otherwise the penalty can offset the interest savings shown here.
- Does this account for taxes, insurance, or escrow?
- No. It models only the principal-and-interest portion of the loan and the effect of extra principal payments. Escrowed property taxes and insurance are separate and are not reduced by paying the mortgage off faster.