# Mortgage Payoff Calculator

Calculate how extra mortgage payments reduce your payoff time and save thousands in interest. Free mortgage early payoff calculator.

## What this calculates

See exactly how much time and money you can save by making extra payments on your mortgage. Enter your current balance, rate, and the extra amount you want to pay each month to see the impact on your payoff timeline and total interest.

## Inputs

- **Current Loan Balance** ($) — min 0 — Your remaining mortgage balance.
- **Interest Rate** (%) — min 0, max 15 — Your current annual mortgage interest rate.
- **Remaining Term (months)** — min 1, max 480 — Number of months remaining on your mortgage.
- **Extra Monthly Payment** ($) — min 0 — Additional amount you want to pay each month toward principal.

## Outputs

- **Original Payoff Time** — formatted as text — Time to pay off without extra payments.
- **New Payoff Time** — formatted as text — Time to pay off with extra payments.
- **Months Saved** — Number of months you shave off the mortgage.
- **Interest Saved** — formatted as currency — Total interest savings from extra payments.
- **Total Savings** — formatted as currency — Total money saved (same as interest saved for extra payments).

## Details

Making extra payments on your mortgage is one of the most effective ways to build equity and save on interest. Even modest additional payments can produce dramatic results. On a $280,000 mortgage at 6.5% over 25 years, adding just $300 per month saves approximately $95,000 in interest and pays off the mortgage over 7 years earlier.

The savings come from two compounding effects: first, each extra dollar goes directly to principal, reducing the balance that accrues interest. Second, with a lower balance, a larger portion of each subsequent regular payment goes to principal instead of interest, creating an accelerating payoff effect.

Before making extra mortgage payments, consider whether the money might work harder elsewhere. If your mortgage rate is 3-4%, you may earn more by investing the extra payment in the stock market (historically 7-10% returns) or paying off higher-rate debt first. At 6-7% mortgage rates, extra payments become more competitive with investment returns and offer a guaranteed, risk-free return equal to your interest rate.

## Frequently Asked Questions

**Q: How much does an extra $100/month save on a mortgage?**

A: On a $300,000 30-year mortgage at 6.5%, an extra $100 per month saves approximately $62,000 in interest and pays off the mortgage 4.5 years early. The savings increase with higher loan balances and interest rates. On the same loan at 7%, the extra $100 saves about $72,000 and shaves off 5 years.

**Q: Is it better to make extra payments or refinance?**

A: If current rates are significantly lower than your rate (1% or more), refinancing may save more. Extra payments make sense when rates are similar to yours or when you want to avoid refinancing costs (typically 2-5% of the loan). You can also combine both strategies: refinance to a lower rate and continue making extra payments at the new lower rate for maximum savings.

**Q: Are there penalties for paying off a mortgage early?**

A: Most modern mortgages do not have prepayment penalties, especially conventional loans originated after 2014 (which are restricted by the Dodd-Frank Act). However, some older loans, jumbo mortgages, or non-conventional loans may include prepayment penalties. Check your mortgage documents or ask your servicer before making large extra payments.

**Q: Should I pay extra on my mortgage or invest?**

A: Compare your mortgage rate to expected investment returns. If your rate is below 4-5%, investing the extra money may earn more over time (stock market averages 7-10%). If your rate is 6%+, the guaranteed, risk-free return from extra payments is competitive with average investment returns. Also consider your risk tolerance, tax benefits, and the psychological value of being mortgage-free.

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Source: https://vastcalc.com/calculators/finance/mortgage-payoff
Category: Finance
Last updated: 2026-04-21