Mortgage Payoff Calculator

Why a small extra payment does so much

A mortgage charges interest on the outstanding balance. An extra payment permanently removes principal, so it cancels every future interest charge that principal would have generated across the remaining decades. The effect compounds: the earlier and larger the extra, the more interest never accrues. A few hundred dollars a month routinely cuts a 30-year mortgage by six to ten years.

The payment must exceed the monthly interest

If a payment is smaller than the interest owed that month, the balance grows instead of shrinks and the loan never pays off. This is negative amortization. The calculator flags it: if your payment does not cover the interest, no extra schedule can help until the base payment rises above the monthly interest charge.

Extra principal versus other uses of the money

Paying a mortgage early earns a guaranteed return equal to the loan rate. That is attractive when the rate is high, but if you have higher-interest debt, no emergency fund, or an unmatched retirement contribution, those usually come first. Prepaying a low-rate mortgage while carrying credit-card debt is moving money the wrong way.

Recasting is the quieter alternative

Extra payments shorten the term but keep the payment the same. A mortgage recast does the opposite: you make one large principal payment and the lender re-amortizes the remaining balance over the original term, lowering the monthly payment while keeping the end date. Recasting suits someone who wants breathing room in the monthly budget rather than an earlier payoff, and it usually costs a small fee rather than the refinance closing costs a rate change would trigger. This page models the shorten-the-term path, which saves the most total interest.

Frequently Asked Questions