Free mortgage payoff calculator — see how extra payments cut years off your loan
This free mortgage payoff calculator (also an extra mortgage payment calculator) shows you how much money you can save — and how many years you can cut off your mortgage — by making extra principal payments. Even a small extra amount each month can save you tens of thousands of dollars in interest over the life of a 30-year mortgage.
Wondering "should I pay extra on my mortgage?" or "how much can I save by paying off early?" This tool gives you a clear, side-by-side comparison of paying your mortgage on schedule vs. making extra payments.
When you make an extra payment on your mortgage, it goes directly toward your principal balance. Because interest is calculated as a percentage of your remaining principal, reducing the principal faster means you pay less interest overall. This creates a snowball effect:
Whether early mortgage payoff makes sense depends on your situation:
How much does an extra $200/month save on a mortgage?
On a typical $250,000, 30-year mortgage at 6.5%, adding $200/month to your payment could save you $50,000+ in interest and cut 7-10 years off your loan. Use the calculator above to test your exact numbers.
Does paying extra on a mortgage reduce monthly payments?
No — your monthly payment stays the same. Extra payments reduce your principal balance, which means you pay off the loan faster. You don't get a lower monthly bill, but you get to stop making payments years earlier.
Is it better to pay extra monthly or make one lump sum payment?
Both work, but monthly extra payments compound faster because they reduce your principal every single month. A lump sum once a year helps too, but consistent small payments each month have a bigger impact on reducing total interest.
What if I refinance — should I still make extra payments?
Yes! Even if you refinance to a lower rate, making extra payments saves you even more because you're paying down principal faster. Refinancing + extra payments = double savings.
Should I invest extra money instead of paying off my mortgage?
It depends on your mortgage rate vs. expected investment returns. If your mortgage rate is 6.5% and you expect 8% in the stock market, investing might be mathematically better. But many people prioritize being mortgage-free for the peace of mind and risk-free return.
There are several proven ways to pay off your mortgage years ahead of schedule. Here are the most effective strategies:
On a 30-year, $250,000 mortgage at 6.5%, you'll pay about $323,000 in interest alone over the life of the loan — more than the original loan amount! That's because mortgage interest is front-loaded: at the beginning, most of your payment goes toward interest, not principal.
This is why making extra payments early on is so powerful. Even small extra payments in the first 5-10 years have a huge impact because you're cutting out the most expensive interest payments. After year 15, most of your payment already goes to principal, so extra payments have less relative impact.
Should you pay off your mortgage early or prioritize other financial goals? Here's a general guide:
How much do I save by paying off my mortgage 5 years early?
On a typical $250,000, 30-year mortgage at 6.5%, paying off 5 years early saves you about $40,000-$50,000 in total interest. The exact amount depends on your loan balance, interest rate, and how early you start making extra payments.
Is it worth paying off a 30-year mortgage in 15 years?
A 15-year mortgage has a higher monthly payment (about 50% more than a 30-year), but you save a fortune in interest. On a $250,000 loan at 6.5%, the 15-year option saves you about $180,000 in total interest. It's worth it if you can comfortably afford the higher payment and have other savings.
What happens when my mortgage is paid off?
Once you make your final mortgage payment, the lender will send you a "satisfaction of mortgage" document (also called a release of lien). This proves you own your home free and clear. You'll still need to pay property taxes and homeowners insurance, but no more mortgage payments!
Should I pay off my mortgage early if I have a low rate?
If your mortgage rate is below 4%, mathematically you might be better off investing extra money in the stock market (which averages 7-10% annual returns). But many people still choose to pay off low-rate mortgages for the peace of mind of being debt-free. It's a personal choice, not just a math decision.
Can I make extra payments on my escrow?
Your escrow account covers property taxes and homeowners insurance. You can't "prepay" escrow in most cases — it's calculated annually. Extra mortgage payments go toward your loan principal, not escrow. If you want to pay ahead on taxes or insurance, you'd need to set aside that money separately.