Mortgage Payoff Calculator
How much sooner extra payments clear your mortgage, and the interest they save.
Good to know. An extra payment early in a loan works hardest: every dollar skips years of interest.
Not financial advice. Uses only the numbers and rates you enter — no live data.
How it works
In plain words
The regular payment is the one that clears what you owe over the years left. Each month, interest is added on the balance and the payment, plus the extra, comes off it. Paying more makes the balance fall faster, so every later month charges less interest, and the loan ends early.
The formula
Payment = B × i ÷ (1 − (1 + i)^−n) Each month: interest = balance × i; balance = balance + interest − (payment + extra)
Worked example
Owing 300,000 at 6.5% with 28 years left, the regular payment is 1,941.05. Paying 200 extra each month clears the loan in 22 years instead of 28 and saves 88,258.23 of interest.
Sources
- Brealey, Myers and Allen, Principles of Corporate Finance, chapter 2 The standard formulas for loan payments, compounding and present value, the same as a spreadsheet’s PMT and FV.
Sources checked September 29, 2026. 6 automated tests check its answers on every change.
About the mortgage payoff calculator
Every extra payment on a mortgage goes straight to the balance. Interest is charged on what you still owe, so a smaller balance means less interest next month, and the month after, for the rest of the loan. That is why modest extra payments cut years off a long mortgage.
Timing matters. Early in a loan most of each payment is interest, so extra money paid then saves the most. The same extra payment in the last few years saves far less. A one-off lump sum, such as a bonus or an inheritance, works the same way and does the most good early.
Before you overpay, check three things. Keep an emergency fund, because money paid into a house is hard to get back quickly. Pay off debts with higher interest first, such as credit cards. And check your loan: most US mortgages allow extra payments at no cost, but some loans elsewhere, including many UK fixed-rate deals, cap overpayments at around 10% a year or charge a fee above that.
Tell your lender that extra money should go to the principal, not towards next month’s payment. Otherwise it may just sit there and save nothing.
Questions people ask
How much does 200 extra a month save on a mortgage?
On 300,000 at 6.5% with 28 years left, it saves about 88,258 of interest and ends the loan six years early.
Is it better to pay extra monthly or in one lump sum?
A lump sum now saves more than the same total spread over years, because it lowers the balance sooner. Monthly extras are easier to keep up.
Does paying extra lower my monthly payment?
Usually not. The payment stays the same and the loan ends sooner. Some lenders can recast the loan to lower the payment instead.
Are there penalties for paying early?
Most US mortgages have none. Elsewhere, fixed-rate loans often allow about 10% a year before an early repayment charge. Check your terms.