Money & Finance
Mortgage Payoff Calculator
See how extra payments shorten your mortgage and what they save, or what investing that money could earn instead.
—
How it works
Behind the numbers
The calculator walks your loan month by month: each month's interest is the remaining balance times the monthly rate, your regular payment covers that interest first, and whatever is left, plus any extra you add, reduces the balance. Extra payments go straight to principal, which is why even a modest extra amount compounds into years saved.
The payoff-vs-invest comparison answers the other half of the question. It takes every extra dollar you would have paid and grows it at the investment return you assume, then sets that future value against the guaranteed interest saved. Neither answer is advice. The return is your assumption, and market returns are never guaranteed, while interest saved is certain.
The scenario table runs the same loan at several extra-payment levels side by side, so you can see what $100, $300, or $500 a month actually buys in years and dollars. The model assumes a fixed rate and no prepayment penalty; some loans charge a fee for paying early, so check your terms. This is a planning estimate, not financial advice.
FAQ
Questions, answered
Is it better to pay off my mortgage early or invest the money?
It depends on the numbers and your risk tolerance. Paying down saves a guaranteed amount of interest; investing might earn more but the return is uncertain. This calculator grows your extra payments at the return you assume and sets that against the guaranteed interest saved, so you can compare both paths side by side.
Do extra mortgage payments go toward principal?
Yes. Your regular payment covers that month's interest first and the rest reduces principal; any extra you add goes entirely to principal. That is why extra payments compound: each one shrinks the balance that future interest is charged on.
How much can I save by paying $200 extra per month?
On a $350,000 loan at 6.5% over 30 years, $200 extra a month pays the loan off about 6 years early and saves roughly $108,000 in interest. Enter your own balance and rate above. The answer moves a lot with both.
Will my lender charge a prepayment penalty?
Some loans do, especially older or non-qualified mortgages, though most conventional fixed-rate loans in the U.S. do not. Check your loan documents or ask your servicer. A penalty changes the math, and this calculator assumes there is none.