Mortgage Payoff Calculator

Calculate how much time and interest you can save by making extra payments on your mortgage or paying it off early.

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What is Early Mortgage Payoff?

Early mortgage payoff refers to the strategy of paying more than the required monthly payment towards your mortgage, or making a lump-sum payment to reduce the principal balance faster than scheduled.

When you pay extra on your mortgage, more of your payment goes toward reducing the principal. This can significantly shorten your loan term and save you money on interest over the life of the loan.

How Mortgage Payoff Calculations Work

The calculation for savings from early mortgage payoff is based on comparing your original mortgage schedule with a new schedule that includes extra payments:

$$I_{saved} = I_{original} - I_{new}$$
$$P_{new} = P_{original} - P_{extra}$$
  • Isaved = Interest saved through early payoff
  • Ioriginal = Total interest paid under the original schedule
  • Inew = Total interest paid under the new schedule with extra payments
  • Pnew = New payment (regular payment plus extra payment)
  • Poriginal = Original scheduled payment
  • Pextra = Extra payment amount

Mortgage Payoff Strategies

Lump Sum Payment

Making a one-time large payment towards your mortgage principal can significantly reduce your loan term and total interest. This might come from a tax refund, inheritance, bonus, or other windfall.

Regular Extra Payments

Adding a fixed amount to your monthly mortgage payment consistently over time can dramatically reduce your loan term. Even small additional amounts can make a big difference in the long run.

How to Use This Calculator

  1. Enter your original mortgage details including loan amount, interest rate, and term.
  2. Input how many payments you've already made on the mortgage.
  3. Enter the extra payment amount you plan to make and select whether it's recurring or one-time.
  4. Click 'Calculate' to see your potential savings in both time and money.

Important Notes

This calculator provides estimates only. Actual savings may vary. Consult with a financial professional for advice specific to your situation.

  • This calculator assumes a fixed interest rate for the entire loan term.
  • Check if your mortgage has prepayment penalties before making extra payments.
  • Consider whether putting extra money into mortgage payoff is the best use of your funds compared to other investments or debt repayment.