Mortgage Payoff calculator
See how adding to your monthly payment shortens your mortgage and slashes the interest you pay.
A worked example
Running this tool on current national benchmarks (Federal Reserve / Freddie Mac via FRED (St. Louis Fed)) — swap in your own numbers to see how the result moves.
- Current loan balance
- $240,000
- Interest rate
- 6.50%
- Years remaining
- 25
- Extra monthly payment
- $200
and pay off 68 months (5.7 years) sooner
- Current payment (P&I)$1,620.50
- New payment$1,820.50
- New payoff time19.3 yrs
How the interest you would save changes with extra monthly payment
Holding the other inputs at the example above, here is how the result moves as extra monthly payment changes.
| Extra monthly payment | Interest you would save | Current payment (P&I) |
|---|---|---|
| $100 | $37,418 | $1,620.50 |
| $200 | $64,196 | $1,620.50 |
| $400 | $100,471 | $1,620.50 |
| $600 | $124,192 | $1,620.50 |
The math behind it
The calculator amortizes your current balance twice at your rate over the years remaining: once as-is, and once with your chosen extra monthly amount added to every payment. The extra goes entirely to principal, so the balance falls faster. Comparing the two schedules gives the months shaved off the loan and the interest saved — the difference between total interest with and without the extra payment.
Assumptions & limits
- The extra payment is applied to principal every month, on top of your regular principal-and-interest payment.
- It works from your current balance and years remaining, not the original loan — enter where you are now.
- Taxes, insurance, and PMI are not modeled; the extra amount is assumed to reduce principal, not go to escrow.
- A single fixed interest rate is assumed for the remaining term.
- It assumes your servicer applies extra payments to principal immediately — confirm this, as some apply them to future interest by default.
Source: Freddie Mac PMMS via FRED. Annual averages; latest weekly reading shown.
Common questions
Why do small extra payments save so much interest?
Every dollar of extra principal removes all the future interest that dollar would have accrued over the remaining years. Early in a loan, when the balance is large, that compounding effect is powerful — which is why even a modest monthly addition can save years and thousands in interest.
Is it better to pay extra monthly or make one lump sum?
Both help, and the earlier the money hits principal the more it saves. A lump sum today beats the same amount spread over a year; a steady monthly extra is easier to sustain. This calculator models a recurring monthly extra — the key is that it reaches principal as soon as possible.
Should I pay down the mortgage or invest instead?
Prepaying gives a guaranteed return equal to your mortgage rate. If you can earn more elsewhere after tax and are comfortable with the risk, investing may win; if you value certainty and a debt-free home, prepaying is a solid guaranteed outcome. This tool quantifies the guaranteed side of that choice.