How to use the Mortgage Payoff Calculator
- Enter the balance showing on your latest mortgage statement, not the original loan amount.
- Enter your current interest rate and the number of payments still remaining.
- Add the extra amount you can commit to every month.
- Read the new payoff date and the interest saved, then test smaller extras to find a sustainable number.
How the calculation works
Every extra dollar goes straight against principal, and principal reduction compounds: the interest that dollar would have generated for the rest of the term never accrues. Early in a mortgage the payment is mostly interest, so extra payments in years one to seven remove far more lifetime cost than the same dollars in year twenty.
The schedule is recomputed payment by payment rather than approximated, so the final month is handled correctly instead of being rounded into a whole year. Interest saved is the difference between total interest on the original schedule and total interest actually paid on the accelerated one.
Before accelerating, compare your mortgage rate against a risk-free alternative. If a savings account or short Treasury yields more than your after-tax mortgage rate, the arithmetic favours saving; if your rate is higher, prepaying is a guaranteed return equal to that rate.
Bₖ₊₁ = Bₖ(1 + r) − (P + extra), payoff when Bₖ ≤ 0, where r = APR / 12Source: Standard fixed-rate amortisation as defined in the CFPB's Loan Estimate and Closing Disclosure calculation rules (12 CFR Part 1026, Appendix J).
Worked example
$250,000 remaining at 6.5% with 300 payments left, adding $300 a month.
- Scheduled payment is about $1,688 a month.
- Paying $1,988 instead retires the balance in roughly 232 months.
- That is 68 months — nearly six years — earlier.
About $131,000 of interest never accrues, for roughly $70,000 of extra principal paid.
Frequently asked questions
Is biweekly payment the same thing?+
Nearly. Twenty-six half payments equal thirteen monthly payments a year, which is the same as adding about 8% to each payment.
Should I tell my lender the extra is principal?+
Yes. Without an instruction many servicers apply overpayments to the next month's payment instead of the principal balance.
Does prepaying lower my monthly payment?+
No, it shortens the term. Only a formal recast or refinance lowers the required payment.
Last reviewed September 1, 2026. We review this page whenever the underlying formula, tax year, published rate or standard changes.