Extra Payment Mortgage Payoff Calculator

Extra principal is a shorter loan, not a smaller escrow

The scheduled payment on a U.S. mortgage is mostly interest in the early years. Send $200 more that is applied to principal and you skip a slice of that interest forever. This mortgage payoff calculator shows months saved and interest avoided. It does not change tax, insurance, or PMI lines.

Enter the balance on the latest statement, the note rate, and years left—not the original purchase price. Then add the extra you can actually send every month.

How the comparison is built

Scheduled principal and interest uses the standard amortization payment for the remaining term. One run pays only that amount until the balance hits zero. The second run pays that amount plus your extra each month. Interest is the sum of monthly interest charges along each path.

If the extra is $0, both paths match. If the extra is so small that you still need the full term, months saved stays near zero.

How to use it

Copy remaining principal from the servicer, not the original loan amount. Use the remaining term in years (a 30-year note in year 4 has about 26 years left). Put extra you can keep up in a slow month, not a bonus you saw once.

Then check take-home pay so the new total still fits rent-alternative housing cost. Open the purchase mortgage calculator if you do not have a loan yet and only want PITI.

Worked examples

A $320,000 balance at 6.5% with 30 years left has scheduled P&I of about $2,023. Adding $200 a month to principal in this model cuts roughly $105,400 of interest and finishes about 6 years and 7 months earlier (79 months).

That $200 is not free. It is $2,400 a year that cannot also max a 401(k) match. Run the 401(k) calculator on the same cash if the match is still unclaimed.

What this will not do

It will not recast the loan, model a refinance into a new rate, or apply a one-time lump sum. For a new rate, term, and closing costs, use the mortgage refinance calculator. It will not credit extra to escrow. Servicers sometimes hold extra for 30 days; this math assumes it hits principal the same month.

Prepayment penalties are rare on modern owner-occupied conventional loans but still exist on some products. Read the note.

Typical examples

Frequently asked questions

How does an extra mortgage payment save interest?

Interest is charged on the remaining principal. An extra principal payment this month means next month’s interest is calculated on a smaller balance. Over years that gap compounds. This page amortizes the loan twice: scheduled payment only, then scheduled plus extra.

Does extra go to escrow or principal?

Only extra labeled as principal (or a recast) shortens the loan. Extra sitting in escrow just prepays tax and insurance. Confirm with the servicer that the $200 is principal reduction.

Is this the same as the mortgage calculator?

No. The mortgage calculator estimates PITI for a purchase. This payoff calculator starts from a remaining balance and remaining term and asks what extra principal does. Use both: one to buy, one to accelerate.

Should I prepay the mortgage or invest?

A guaranteed 6.5% after-tax equivalent on a mortgage is not the same as a hoped-for 7% in a 401(k). This page only shows the interest you avoid. It does not decide the allocation.

What about biweekly payments?

True biweekly plans make 26 half-payments a year (13 full payments). That is roughly one extra monthly payment per year. You can approximate it here by putting one-twelfth of a regular P&I in the extra field.