Extra Mortgage Payment Payoff Calculator
Calculate how many months and how much interest you save by paying extra principal monthly.
Enter loan, rate, term, and extra payment for new payoff.
Every dollar of extra principal kills future interest. Mortgage interest compounds monthly on the remaining balance. Knock down the balance early and the interest meter runs slower for the rest of the loan.
The numbers shock new homeowners. A $200,000 loan at 6.5% for 30 years pays $255,088 in total interest if you only make the minimum. That is more interest than principal. Adding just $200/month in extra principal cuts the loan to ~22 years and saves about $84,000 in interest.
Why front-loaded interest matters. In the first year of a 30-year mortgage, about 80% of each payment is interest. By year 25, that ratio has flipped — most of each payment is principal. The first $1,000 of extra principal you send in month 1 saves you many years of compounded interest. The same $1,000 sent in year 25 saves almost nothing.
Three ways to deploy extra payments.
- Same dollar amount every month (this calculator’s mode). Easy to budget.
- Round up to the next $100. Subtle, automatic, no commitment to a specific number.
- One annual lump sum (tax refund, bonus). Same total but slightly less effective than monthly.
The opportunity-cost question. Should you pay down a 6.5% mortgage early or invest the extra cash? At long-run stock returns of 7-10% you might earn more in the market. But mortgage payoff is risk-free, tax-free, and forced savings. Most personal finance writers split the difference: pay enough extra to feel the progress, but do not stop investing in tax-advantaged accounts (401k match especially).
Recasting versus prepaying. A few servicers let you recast — they re-amortize the loan to the new balance after a lump-sum prepayment. Same payoff date, lower monthly payment. Useful if you want flexibility back. Most people just prepay and keep the original payment, which kills the loan faster.
Worked example. $250,000 at 6.0% for 30 years.
- Base P&I: $1,498.88/month
- Base total interest: $289,597
- With $300/month extra: payoff in 21.5 years, total interest $179,400
- Saved: 8.5 years and $110,000
Verify with your servicer. Some servicers default to applying extra payments to next month’s installment, not principal. Tell them in writing: “apply this to principal only.” Otherwise you are just paying ahead, not paying down.