Mortgage Payoff Calculator — Extra Payments
How much sooner extra monthly, annual or lump-sum payments clear your mortgage, the interest saved, the extra needed to finish in 15 years and whether investing the money instead would beat it — any currency.
| Current payment (principal + interest) | — |
|---|---|
| Scheduled payoff / total interest | — |
| With extra payments: payoff / interest | — |
| Time saved | — |
| Total extra paid | — |
| Return on the extra payments | — |
| Same money invested instead | — |
| Extra needed to pay off in 15 years | — |
In short
Extra mortgage payments go straight to principal and earn a guaranteed, tax-free return equal to the rate: $200 a month plus $2,000 a year on a $320,000 balance at 6.25% with 27 years left clears the loan 8 years early and saves $116,244 of interest for $81,400 of extra payments; finishing in 15 years would need about $697 a month extra.
Who this is for: Homeowners deciding how much extra to pay, when to make a lump-sum payment, and whether to prepay or invest.
How extra payments shorten a mortgage
Every extra dollar paid on a mortgage goes straight to principal, so it stops accruing interest at your mortgage rate for the rest of the term — a guaranteed, tax-free return equal to the rate. Because interest is calculated on the balance each month, early extra payments save far more than later ones: $200 a month on a $320,000 loan at 6.25% removes nearly five years and tens of thousands in interest. The calculator applies monthly, annual and one-off extras, reports the new payoff date and interest saved, and tells you the extra needed to finish in 15 years.
The comparison row answers the common question: would the money do better invested? It grows the same extra payments at your expected return to the early payoff date, and sets that against the opposite strategy — prepay, then invest the freed-up mortgage payment until the original end date. Prepaying wins when the mortgage rate is close to or above the after-tax return you expect, and it always wins on certainty.
See also: Amortization Schedule Calculator, Mortgage Refinance Calculator.
Assumptions
- Fixed rate; principal-and-interest payment only; extras applied to principal in the month paid (annual extra in month 12, 24…; lump sum now).
- Interest saved = scheduled total interest minus total interest with extras; extra paid counts only what actually reduces principal.
- Investment comparison grows the same extras at your return to the early payoff date, versus prepaying then investing the freed payment to the original end date; before tax and risk.
- 15-year figure = payment needed to amortise the remaining balance over 180 months minus the current payment.
Worked example
Payment $2,047 a month; scheduled interest $343,222 over 324 months. With the extras the loan is cleared in 228 months — 8 years early — with $226,978 of interest, a saving of $116,244 for $81,400 of extra payments. To finish in 15 years instead you would need about $697 a month extra.
Frequently asked questions
Is it better to pay extra monthly or in a lump sum?
Earlier is better: a lump sum now saves more than the same total spread over years, but regular monthly extras are easier to sustain.
Do I need to tell my lender?
Yes — specify that the extra is a principal payment; otherwise some servicers hold it as an early instalment for next month.
Should I pay off the mortgage or invest?
Compare the mortgage rate with the after-tax return you can expect; above roughly 6% the guaranteed saving is hard to beat. Fund emergency savings and any employer pension match first.
Does paying extra lower my monthly payment?
No, unless you ask for a recast (re-amortisation); it shortens the term instead. A recast after a lump sum lowers the payment for a small fee.
What about biweekly payments?
Paying half the monthly amount every two weeks makes 13 monthly payments a year — equivalent to one extra payment annually; see the biweekly mortgage calculator.
Is there a prepayment penalty?
Rare on current conforming loans; some jumbo, investor and non-QM loans charge up to 2–3% in the first years. Check your note.
Does paying extra affect my escrow?
No — escrow covers taxes and insurance and continues until the loan is closed; your total monthly bill falls only when the loan is paid off.
Can I pay extra on an Islamic home finance or UK mortgage?
Usually yes within annual overpayment allowances (often 10% of the balance for UK fixed deals) before early-repayment charges apply.
Related calculators
Found an error? Report it — tell us the inputs, the result you got, what you expected and the rule or source. Confirmed corrections are published within a week.