How mortgage payoff (extra payment) calculator works
This calculator compares your mortgage's standard amortization schedule with an accelerated one where you pay extra toward principal each month, optionally plus a one-time lump-sum principal payment. Enter your current balance, interest rate, and remaining years (or your required monthly payment), then add any extra monthly amount and lump sum. The tool produces a year-by-year schedule showing the remaining balance and interest paid each year under both scenarios, plus your payoff date, years shaved off, and total interest saved.
Each month the calculator accrues interest on the remaining balance at the monthly rate (annual rate divided by 12), then applies your scheduled payment plus the extra to that interest first and the remainder to principal. A lump sum is applied directly to principal at the start, before the first month's interest accrues, so every subsequent month's interest is computed on a smaller base. Adding even a small extra each month compounds: the balance drops faster, so less interest accrues every following month, which is where the real savings come from.
Payoff dates are computed from a start date (today by default, or any date you choose) by adding the number of months to payoff. This is a planning estimate for a fixed-rate mortgage with level payments; it does not model escrow, taxes, insurance, rate changes, or prepayment penalties. Some lenders impose limits or fees on extra principal payments, so confirm the terms with yours. This tool is for education and is not financial advice.
Frequently asked questions
How does paying extra on my mortgage save interest?
Every extra dollar you pay above the scheduled payment goes straight to principal, reducing the balance that future interest is charged on. Because interest is computed each month on the remaining balance, a smaller balance means less interest every month afterward, so the savings compound over the whole loan. The tool shows the total interest saved and how many years earlier you finish.
What is a lump-sum principal payment?
A lump-sum principal payment is a one-time extra amount applied directly to your loan balance, separate from your normal monthly payment. The calculator applies it at the start before the first month's interest accrues. Common examples are a bonus, a tax refund, or sale proceeds. The larger the lump sum, the more each future month's interest drops.
Should I use my remaining years or my monthly payment?
Enter your remaining years and the tool derives the required monthly payment from the standard amortization formula. If you already know your exact required monthly payment (for example from your lender's statement), enter it in the monthly payment field instead and it overrides the term. Both give the same standard schedule when matched.
Can my lender charge a prepayment penalty?
Some loans include prepayment penalties that limit or charge for extra principal payments. Many fixed-rate residential mortgages in the US do not allow them after the first few years, but terms vary. Confirm your loan's prepayment terms before committing to an extra-payment strategy. This calculator does not account for penalties or fees.
