Last Updated: December 2025.
Use this comprehensive Mortgage Payoff Calculator to determine how much time and interest you can save by making extra principal payments on your home loan. Get on the fast track to financial freedom today.
Mortgage Payoff Calculator
Your Payoff Acceleration Results
Interest Saved: $0.00
Time Saved: 0 Years, 0 Months
Detailed Calculation Steps
1. Calculating Original Monthly Payment…
2. Calculating Original Number of Payments…
3. Calculating New Number of Payments with Extra Payment…
4. Calculating Total Interest Saved…
5. Determining Time Saved…
Mortgage Payoff Calculator Formula
The calculation relies on two main stages: finding the original and the accelerated amortization schedules.
Original Monthly Payment (M):
$M = P \cdot \frac{r(1+r)^N}{(1+r)^N - 1}$
Where: $r = \frac{Annual\ Rate}{12}$ and $N = Original\ Term\ (months)$
New Payoff Term (N_new):
This formula solves for the new number of payments when a larger payment ($M’ = M + E$) is made:
$N_{new} = -\frac{\log(1 - \frac{r \cdot P}{M+E})}{\log(1 + r)}$
Formula Sources: Investopedia, Bankrate
Variables Explained
Here is a breakdown of the inputs required for the calculation:
- Current Principal Balance ($): The outstanding balance on your mortgage at the time of calculation.
- Annual Interest Rate (%): The stated annual percentage rate (APR) of your loan.
- Original Loan Term (Years): The initial length of the mortgage, typically 15 or 30 years.
- Extra Monthly Principal Payment ($): The additional, voluntary amount you plan to add to your regular monthly payment.
What is the Mortgage Payoff Calculator?
A mortgage payoff calculator is a financial tool designed to illustrate the powerful impact of making additional payments toward the principal balance of a loan. By inputting your current loan details and a proposed extra monthly payment, the calculator generates a new, accelerated amortization schedule. This immediately reveals how much sooner you can be debt-free and the substantial amount of interest charges you avoid over the life of the loan.
For most homeowners, a mortgage represents the largest debt they will ever carry. Even small, consistent extra payments can shave years off the repayment term, leading to tens of thousands of dollars in savings. This calculator provides a clear, quantitative roadmap for achieving that goal, helping users to budget effectively and visualize their path to home ownership.
How to Calculate Mortgage Payoff (Example)
- Determine Original Payment (M): Start with a $200,000 principal balance, a 6.0% annual rate, and a 30-year term. The standard monthly payment (M) is $1,199.10.
- Define Accelerated Payment (M’): Decide to add an extra $50 to the principal each month, making the new total payment (M’) $1,249.10.
- Calculate Original Term (N): The original term is 360 months (30 years * 12 months). The original total interest paid would be $231,674.
- Calculate New Payoff Term (N_new): Use the amortization formula with the new payment $1,249.10. The new term is approximately 330 months (27 years, 6 months).
- Determine Savings: The total time saved is 30 months (2.5 years). The total interest saved is the difference between the original and the new total interest paid.
Related Calculators
Explore these tools to manage other aspects of your personal finance:
- Amortization Schedule Calculator
- Refinance Savings Calculator
- Debt Consolidation Calculator
- Annualized Return Calculator
Frequently Asked Questions (FAQ)
Can I make a one-time extra payment instead of monthly?
Yes, while this calculator focuses on recurring monthly payments, one-time lump-sum payments will also reduce your principal and shorten the loan term. You can approximate a one-time payment by spreading it out over the months (e.g., $1,200 annually equals an extra $100 per month).
What happens to my payment if I pay off my mortgage early?
Once you make the final payment that zeroes out the principal balance, you stop making payments entirely. You will receive a lien release from the lender, and your debt obligation is complete.
Are there any penalties for paying off my mortgage early?
Most modern mortgages do not have a prepayment penalty, especially in the US. However, you should always check your original loan documents to confirm that you are not subject to any fees.
Does the extra payment go directly to the principal?
Yes, when you designate a payment as ‘extra principal,’ the entire amount must be applied directly to reduce the loan’s principal balance, immediately lowering the base upon which the next month’s interest is calculated.