Mortgage Payoff Calculator

It depends on your balance, rate, and how many payments are left, but the effect compounds: on a $250,000 balance at 6.5% with 25 years (300 payments) left, an extra $200 a month pays the loan off 5 years and 6 months early and saves about $64,928 in interest.

Usually, yes, and for a simple reason: paying half your payment every two weeks works out to 26 half-payments a year, which is 13 full monthly payments instead of 12. On that same $250,000 loan, the extra 13th payment (about $141 a month in principal terms) pays it off 4 years and 2 months early and saves about $49,728 in interest — without you having to think about it month to month.

A lump sum saves the most per dollar right when it's applied, since it removes that principal from every future month's interest calculation, but it's a one-time boost rather than an ongoing habit. A $10,000 lump sum on that same $250,000 loan saves 27 payments (2 years and 3 months) — smaller than the ongoing $200/month plan, but instant and requires no changes to your budget going forward.

Switch to "Target payoff date," enter how many years and months you want left, and the calculator solves for it. On that $250,000, 6.5%, 25-years-remaining example, paying it off in 15 years instead of 25 takes $489.76 in extra principal every month.

Not always. Some servicers apply extra money to next month's payment (which reduces your balance more slowly) unless you specifically mark it as "additional principal only." Check your servicer's payment options or call them to confirm before assuming an extra payment landed the way you intended.

Most mortgages, especially those originated after new federal mortgage rules took effect in 2014, can't carry a prepayment penalty. Older loans or some non-qualified mortgages occasionally still can. Check your loan note or ask your servicer directly if you're unsure before making a large extra payment.

This calculator only measures the guaranteed, risk-free return of paying down debt at your mortgage rate — money applied to principal stops accruing interest at that rate for good. Whether that beats investing depends on your rate, your investment time horizon and risk tolerance, and other goals like an emergency fund or employer 401(k) match, which this calculator doesn't weigh for you.

No — for a standard fixed-rate mortgage, extra principal payments don't change your required monthly payment; they shorten the loan instead, since the same payment now retires a smaller balance faster. Some servicers offer a separate "recast," which does lower the required payment using your existing extra principal, but that's a different request you'd make to your lender.

Early in a mortgage, most of each payment is interest, because interest is calculated on a large remaining balance. Extra principal paid in year 2 removes that balance — and the interest it would have generated — for the rest of the loan's life, which is more total months than extra principal paid in year 20. That's why the same dollar amount saves more the earlier it's applied.

This calculator approximates biweekly payments as an even 1/12 extra principal payment every month, which captures the main benefit — the 13th annual payment. A bank's actual biweekly program also applies payments mid-month rather than once a month, saving a small amount of additional interest this estimate doesn't capture, so real results are usually a touch better than shown here.