Mortgage Payoff Calculator
Discover how extra payments can save you thousands in interest and help you pay off your mortgage years earlier. Calculate the impact of additional payments on your existing mortgage.
Whether you're considering extra monthly payments, annual lump sums, or switching to biweekly payments, our mortgage payoff calculator shows you exactly how much time and money you can save. Even small additional payments can make a dramatic difference in your total interest costs and payoff timeline. Use this tool to create a personalized mortgage payoff strategy that fits your budget and financial goals.
Current Mortgage Details
Extra Payment Options
Additional amount paid toward principal each month
Extra payment made once per year (e.g., tax refund, bonus)
One-time extra payment applied immediately
Pay half the monthly amount every two weeks (26 payments/year = 13 months)
Payoff Analysis
Current Payment Plan
With Extra Payments
Your Savings
Mortgage Payoff Strategies That Work
Extra Payment Methods
- • Monthly Extra: Most consistent approach
- • Annual Payments: Use tax refunds or bonuses
- • Windfalls: Apply inheritance, gifts, raises
- • Biweekly Schedule: Automatic extra month yearly
- • Round Up: Pay $1,550 instead of $1,487
Quick Impact Strategies
- • $100/month: Can save 4-6 years typically
- • $50/month: Still saves 2-3 years
- • 13th payment: Biweekly = 4-6 years saved
- • Recast option: Lower payments after lump sum
- • Principal only: Specify extra goes to principal
🧠 Smart Considerations
- • Emergency fund first: 3-6 months expenses
- • High-interest debt: Pay credit cards first
- • 401k match: Don't miss free money
- • Tax deductions: Mortgage interest benefit
- • Investment returns: Compare to stock market
The Power of Extra Payments
Why extra payments are so powerful: Every dollar of extra payment goes directly to principal, immediately reducing the balance that future interest is calculated on.
- • Compound Effect: Savings accelerate over time
- • Guaranteed Return: Equal to your interest rate
- • Build Equity: Own more of your home faster
Real Example: On a $300,000 mortgage at 6.5% with 25 years remaining, just $500 extra monthly saves approximately $122,000 in interest and 7+ years.
Start small: Even $25-50 extra monthly makes a meaningful difference. You can always increase payments as your income grows.
Frequently Asked Questions
Should I pay off my mortgage early or invest?
It depends on your mortgage rate and investment returns. If your rate is above 5-6%, paying extra is often smart. If below 4%, investing may yield better long-term returns. Consider your risk tolerance and other financial goals.
What's the best strategy for extra payments?
Make extra principal payments consistently rather than large lump sums when possible. Even $50-100 extra monthly compounds significantly over time. Always specify extra payments go toward principal.
Should I refinance or make extra payments?
If you can get a significantly lower rate (0.5-1% or more), refinancing often saves more money. However, consider closing costs and how long you plan to stay in the home.
Can I make extra payments with any mortgage type?
Most mortgages allow extra payments without penalty, but some loans have prepayment penalties. Check your loan terms or contact your lender to confirm before making extra payments.
How do bi-weekly payments work?
Instead of 12 monthly payments, you make 26 bi-weekly payments (half your monthly amount). This equals 13 monthly payments per year, significantly reducing your loan term and interest.
What if I lose the mortgage interest tax deduction?
The tax deduction is worth less than the interest you pay. For every dollar of interest, you might save 22-37 cents in taxes, but you still pay the full dollar in interest.
Should I pay extra if I have other debt?
Generally, pay off higher-interest debt first (credit cards, personal loans). Only focus on mortgage payoff after eliminating debt with rates higher than your mortgage rate.
What if I need the extra payment money later?
Extra mortgage payments build equity but reduce liquidity. Ensure you have a solid emergency fund and adequate cash reserves before aggressively paying down your mortgage.