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Mortgage Payoff Calculator

See how extra payments cut years off your mortgage — and exactly how much interest you save along the way.

Pay Off Your Mortgage Years Early

Why Extra Payments Are So Powerful

Every extra dollar goes straight to principal. Your regular payment is mostly interest in the early years — but extra payments skip the interest entirely and shrink the balance that all future interest is calculated on.

The effect compounds. A smaller balance this month means less interest next month, which means even more of your regular payment hits principal.

Key Insight: On a $300,000 mortgage at 6.5% with 25 years left, just $200 extra per month saves roughly $70,000 in interest and pays the loan off about 5 years early.

Four Ways to Accelerate Your Payoff

1. Fixed Extra Monthly Payment

Add a set amount to every payment. Easiest to automate and budget for.

2. Bi-Weekly Payments

Pay half your payment every two weeks — 26 half-payments equals 13 full payments per year, one extra payment annually.

3. Lump Sums from Windfalls

Tax refunds, bonuses, and inheritances applied to principal early in the loan have the largest impact.

4. Round Up

Round a $1,847 payment to $2,000. Painless, and worth years off the loan over time.

Should You Pay Extra — or Invest Instead?

Pay the mortgage first if: your rate is above 6-7%, you are within 10 years of retirement, or you deeply value the guaranteed return and peace of mind.

Invest first if: your rate is below 4-5%, you have not captured your full 401(k) employer match, or you have high-interest debt (pay that before either).

Order of operations: employer match → high-interest debt → emergency fund → then choose between extra mortgage payments and taxable investing based on your rate.

Avoid These Payoff Mistakes

  • ❌ Not telling your servicer to apply extra payments to principal (some apply it to next month's payment instead)
  • ❌ Paying a fee for a lender's "bi-weekly program" — you can do the same thing free
  • ❌ Draining your emergency fund to pay down the house
  • ❌ Prepaying a 3% mortgage while carrying 22% credit card debt
  • ❌ Ignoring prepayment penalties (rare now, but check your loan docs)

Frequently Asked Questions

One extra payment per year typically pays a 30-year mortgage off 4-5 years early. On a $300,000 loan at 6.5%, that saves roughly $70,000-90,000 in interest. The easiest way to do it automatically is bi-weekly payments: 26 half-payments per year equals 13 full payments instead of 12.
Dollar for dollar, sooner beats later — a lump sum today saves more interest than the same amount spread over the year. In practice, most people succeed with both: a modest automatic extra payment each month, plus windfalls (tax refunds, bonuses) applied as lump sums. What matters most is that every extra dollar is applied to principal.
Compare your mortgage rate to realistic after-tax investment returns. Above 6-7%, paying the mortgage is a strong guaranteed return. Below 4-5%, long-term investors usually come out ahead in the market. In between, it is a judgment call — many households split the difference. Always capture your full 401(k) employer match and clear high-interest debt before extra mortgage payments.
No — your required payment stays the same; extra payments shorten the loan instead. Every extra dollar reduces principal, so more of each future payment goes to principal and the loan ends years sooner. If you want a lower required payment, you would need to refinance or request a recast (a one-time reamortization after a large lump sum, usually for a small fee).
Tell your servicer explicitly — do not assume. In your payment portal, look for an "apply to principal" option, or include written instructions with a mailed check. Some servicers otherwise treat extra money as an early next-month payment, which saves you nothing. Check your next statement to confirm the principal balance dropped by the extra amount.

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