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Mortgage Payoff Calculator: See How Fast Extra Payments Clear Your Loan
Enter what you owe, your rate and your regular payment. Add a monthly extra amount or a one-time lump sum to see the new payoff time and how much interest you avoid.
How the payoff time is found
The calculator replays your loan one month at a time. Each month it charges interest equal to the balance times the annual rate divided by 12, subtracts that interest from your payment, and applies the rest to the balance. It stops when the balance reaches zero and counts the months. The same replay runs twice: once with your regular payment alone, and once with your extra monthly amount and lump sum included. The difference is the time and interest you save.
If your payment is no larger than the first month of interest, the balance can never fall, and the calculator says so instead of looping forever.
Lump sum or monthly extra?
Money paid sooner reduces the balance sooner, so every month of interest on that amount disappears. A lump sum now has the largest effect per unit of currency because it works for the whole remaining term. A monthly extra delivers a similar total reduction gradually. Try both with the same total budget to compare them.
Before paying early, check whether your loan has a prepayment charge, whether extra money is applied to principal, and whether you would still keep an emergency fund. Paying off a loan faster only helps if you can do it without taking on costlier debt later.
Getting the inputs right
- Balance: use the principal still owed from a recent statement, not the original loan.
- Payment: use principal and interest only. Property tax and insurance paid through escrow do not reduce the loan.
- Rate: use the current annual rate. For an adjustable loan, run the calculator again after each reset.
Small differences in how the lender handles daily interest or payment dates can move the result by a month or so.
Other ways to look at it
If you want the month-by-month schedule, use the amortization calculator. To see the original payment and a purchase budget, the mortgage calculator covers tax, insurance and extras in one place. If a lower rate is available, the refinance calculator shows whether switching pays back its costs.
Before you make extra payments
Check your loan terms first. Some lenders charge a prepayment fee, limit how much you may overpay each year, or apply extra money to the next instalment unless you instruct them to reduce principal. Ask for extra payments to be applied to principal, and keep that instruction in writing. Also compare the mortgage rate with what you could earn or save elsewhere, such as repaying a higher-rate debt first or building an emergency fund.
Worked example
You owe 250,000 at 6%, pay 1,700 a month, and decide to add 300 monthly plus a 10,000 lump sum from a bonus.
Inputs
| Current loan balance | 250000 |
|---|---|
| Annual interest rate | 6 % |
| Regular monthly payment (principal and interest) | 1700 |
| Extra payment per month | 300 |
| One-time lump sum now | 10000 |
Result
Compared with 22 years 3 months at the regular payment.
| Payoff time at your regular payment | 22 years 3 months |
|---|---|
| Interest at your regular payment | 203,036.11 |
| Payoff time with your extras | 15 years 4 months |
| Interest with your extras | 127,432.84 |
| Time saved | 6 years 11 months |
| Interest saved | 75,603.27 |
- Payoff time counts months from today, assuming the rate stays fixed and each payment is made on schedule.
Financial disclaimer: Results are estimates for planning and education. They are not financial, tax or legal advice. Fees, taxes, rates and rules vary by lender, product and country, so confirm figures with your provider or a qualified adviser before making decisions.
Frequently asked questions
How do I pay off my mortgage early?
Pay more than the required amount and make sure the extra is applied to principal. Even a modest extra monthly payment shortens the loan, because it lowers the balance that future interest is charged on.
How is the interest saved calculated?
The calculator totals interest over the loan with only the regular payment, then again with your extras. The interest saved is the difference between the two totals.
Why does the calculator say the balance would never fall?
Your payment is smaller than one month of interest. Increase the payment or check the rate and balance you entered.
Should I pay off a mortgage or invest instead?
That depends on your rate, risk tolerance, tax situation and other debts. Paying down a loan gives a certain return equal to its interest rate; investing returns are not certain. This page only shows the loan side.
Does a lump sum change my monthly payment?
Not unless the lender re-amortizes the loan. The calculator keeps your payment the same, so the lump sum shortens the term instead.
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References and sources
- Consumer Financial Protection Bureau: information on mortgage servicing and paying extra toward principal. Link
- Standard amortization arithmetic from introductory finance textbooks.