Mortgage Payoff Calculator
A mortgage payoff calculator shows when your loan will be paid off and how much interest extra payments can save. Enter your balance, rate, term, and any extra monthly amount in the calculator above to see your new payoff date instantly.
The biggest takeaway: extra principal paid early in a 30-year loan saves far more than the same amount paid near the end. That is because interest is charged on your remaining balance, so cutting it sooner stops more interest from ever accruing.
How it's calculated
This calculator compares two paths: your scheduled payoff and a faster payoff with extra principal. It uses your balance, interest rate, and term to build an amortization schedule, then adds your extra payment to principal each month.
Every dollar of extra payment lowers your balance, so less interest is charged going forward. The CFPB explains that most of an early payment goes to interest, with the rest reducing principal and building equity. As your balance falls, more of each regular payment shifts to principal, which speeds up payoff. Always confirm with your servicer that extra money is applied to principal, not held or pushed to next month's bill.
A worked example
Say you owe $300,000 at 6.5% on a 30-year loan. Your scheduled principal and interest payment is $1,896.20.
With no extra payments, you pay it off in 360 months and pay about $382,634 in interest. Now add $200 a month toward principal.
In month 1, $1,625.00 goes to interest. The scheduled payment covers $271.20 of principal, and your extra $200 lifts the total principal reduction to $471.20.
That small change pays the loan off in 277 months, about 23 years and 1 month. Total interest drops to $279,185.
You save $103,449 in interest and 83 months, nearly 7 years.
Common mistakes to avoid
- Not telling your servicer to apply extra money to principal. Mark each extra payment as 'principal only' or it may be held or counted as an early next-month payment.
- Assuming a prepayment penalty applies. Many mortgages have none, and per the CFPB penalties usually apply only if you pay off the whole loan within the first three to five years.
- Waiting until late in the loan to add extra payments. Extra principal in year 2 saves far more interest than the same amount in year 25.
- Confusing recasting with prepaying. Recasting re-amortizes your balance to lower the monthly payment; prepaying keeps the payment but shortens the term and cuts interest.
- Ignoring opportunity cost. Before overpaying, weigh higher-return uses like an employer 401(k) match, high-interest debt, or an emergency fund.
Frequently asked questions
How does a mortgage payoff calculator work?
A mortgage payoff calculator builds your amortization schedule and shows your payoff date with and without extra payments. You enter your balance, rate, term, and any extra monthly amount. It then calculates total interest and months saved so you can compare both paths.
Do extra payments really go toward principal?
Extra payments go toward principal only if you direct them that way. Mark each extra payment as 'principal' and confirm your servicer applied it. Freddie Mac advises checking that the bank credited the extra amount to your balance rather than future interest.
Will I owe a penalty for paying off my mortgage early?
Usually no, but it depends on your loan terms. The CFPB notes that not all mortgages have a prepayment penalty, and when one exists it typically applies only if you pay off the full balance within the first three to five years. Check your loan documents to be sure.
How much can extra payments save me?
Extra payments can save tens of thousands in interest and years off your loan. In our example, adding $200 a month to a $300,000 loan at 6.5% saves $103,449 in interest and pays it off 83 months early. Use the calculator above with your own numbers.
What is the difference between prepaying and recasting a mortgage?
Prepaying means paying extra principal to shorten your term and cut interest while keeping the same monthly payment. Recasting re-amortizes your remaining balance over the original term to lower the monthly payment. Recasting does not save as much interest as prepaying the same amount.
Why is my mortgage payoff amount higher than my last statement balance?
A mortgage payoff amount is higher than your statement balance because it adds interest and fees your statement doesn't yet show. It includes per-diem interest built up since your last statement, plus any recording or administrative fee your loan allows. Escrow adds another wrinkle. Some servicers apply your remaining escrow balance to lower the payoff number. Others refund escrow separately after your loan closes. Ask your servicer how they will handle yours before sending your final payment.
What does a mortgage payoff statement include, and how fast must my servicer send one?
A mortgage payoff statement lists the exact amount that fully satisfies your loan. It shows your remaining principal, interest accrued through a stated payoff date, and any fees the payoff includes. Federal mortgage servicing rules set a deadline for this response: your servicer must send an accurate payoff statement within seven business days of your written request, per the CFPB. If you have an escrow account, that balance is typically handled separately — federal rules require your servicer to refund any leftover escrow within 20 days of your full payoff, not counting weekends or holidays.
How long is a mortgage payoff quote good for, and what happens if I pay the wrong amount?
A mortgage payoff quote is only accurate through the specific date printed on the statement, because interest keeps accruing every day after that date. If you won't send payment by that date, ask your servicer for an updated payoff statement rather than guessing at the new total. Paying your last statement balance instead of the official payoff amount is a common mistake, since the payoff figure includes interest and fees the statement balance does not. That shortfall leaves a small balance still open on your loan, which can trigger continued interest, a late fee, or a delay in your lien being released. Always pay the exact figure from your payoff statement, sent the way your servicer specifies.
Sources
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