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Calculate mortgage payoff with extra payments: see new payoff time, interest saved and amortization with extra.
Calculate mortgage payoff with extra payments: see new payoff time, interest saved and amortization with extra.
Enter values above and click Calculate — results will appear here with the formula explained.
This simulates amortization: standard payment plus extra goes directly to principal, reducing balance faster and cutting interest. Extra early saves more than extra late — a dollar of prepayment in year 2 kills ~28 years of its interest tail, while the same dollar in year 24 kills barely any. Front-loading is the entire game, which is why starting extra payments now beats doubling them later.
Assumes fixed rate, extra always applied to principal, no prepayment penalty. Most modern US residential mortgages have no prepayment penalties, but always confirm in the note — and confirm each extra is coded to principal curtailment, not escrow advance or 'next payment' (which merely prepays interest-inclusive installments and saves far less). One misapplied year of extras can cost thousands in phantom savings.
The biweekly half-payment trick equals one extra full payment yearly (26 halves = 13 wholes) and works through the same principal mechanism — no magic, just 1/12 more paid annually. Lump sums (bonuses, tax refunds) behave identically scaled: a single $5,000 lump in year 3 of a $280k/6.5% loan saves roughly $15,000+ in lifetime interest. Model windfalls here before spending them.
Recast versus refinance versus prepay: extra payments shorten term at the same rate with zero costs; refinancing lowers rate but charges 2–5% in closing costs and restarts paperwork; recasting (a lump sum plus lender re-amortization for a small fee) lowers the payment while keeping rate and term. Cash-rich borrowers wanting lower payments should price recasting first — it is the cheapest payment reduction available.
The invest-instead debate hinges on after-tax, risk-adjusted comparison: extra mortgage payments earn a guaranteed, risk-free return equal to the mortgage rate (6.5% guaranteed beats most alternatives on certainty, though markets may average higher with volatility). Above ~6–7% rates prepayment usually wins; below ~4% investing often wins mathematically — with liquidity as the tiebreak (money in home equity is harder to access than brokerage funds; keep emergency reserves first).
For major financial decisions, verify with authoritative sources (CFPB guides, your loan servicer) and run conservative versus optimistic scenarios. This tool is educational, not professional advice — it assumes constant inputs and excludes rate changes, taxes and variability that affect real outcomes.
Calculate mortgage payoff with extra payments: see new payoff time, interest saved and amortization with extra. Formula: Standard P = balance*r*(1+r)^n/((1+r)^n-1). Example: With $280k at 6.5% for 25y, payment $1,789.
This simulates amortization: standard payment plus extra goes directly to principal, reducing balance faster and cutting interest. Extra early saves more than extra late — a dollar of prepayment in year 2 kills ~28 years of its interest tail, while the same dollar in year 24 kills barely any. Front-loading is the entire game, which is why starting extra payments now beats doubling them later.
Assumes fixed rate, extra always applied to principal, no prepayment penalty. Most modern US residential mortgages have no prepayment penalties, but always confirm in the note — and confirm each extra is coded to principal curtailment, not escrow advance or 'next payment' (which merely prepays interest-inclusive installments and saves far less). One misapplied year of extras can cost thousands in phantom savings.
The biweekly half-payment trick equals one extra full payment yearly (26 halves = 13 wholes) and works through the same principal mechanism — no magic, just 1/12 more paid annually. Lump sums (bonuses, tax refunds) behave identically scaled: a single $5,000 lump in year 3 of a $280k/6.5% loan saves roughly $15,000+ in lifetime interest. Model windfalls here before spending them.
Recast versus refinance versus prepay: extra payments shorten term at the same rate with zero costs; refinancing lowers rate but charges 2–5% in closing costs and restarts paperwork; recasting (a lump sum plus lender re-amortization for a small fee) lowers the payment while keeping rate and term. Cash-rich borrowers wanting lower payments should price recasting first — it is the cheapest payment reduction available.
The invest-instead debate hinges on after-tax, risk-adjusted comparison: extra mortgage payments earn a guaranteed, risk-free return equal to the mortgage rate (6.5% guaranteed beats most alternatives on certainty, though markets may average higher with volatility). Above ~6–7% rates prepayment usually wins; below ~4% investing often wins mathematically — with liquidity as the tiebreak (money in home equity is harder to access than brokerage funds; keep emergency reserves first).
For major financial decisions, verify with authoritative sources (CFPB guides, your loan servicer) and run conservative versus optimistic scenarios. This tool is educational, not professional advice — it assumes constant inputs and excludes rate changes, taxes and variability that affect real outcomes.
With $280k at 6.5% for 25y, payment $1,789. Adding $400/mo pays off in ~18y, saving 7 years and ~$78k interest. A lump-sum variant: $10,000 once in year 2 saves roughly $30,000+ in lifetime interest and ~20 months — showing why early windfalls belong against principal first.
Last reviewed: September 2026 · Report an error