💰 Financial
Mortgage Payoff Calculator
Calculate how much time and interest you can save by making extra payments toward your mortgage. See the impact of one-time, monthly, or annual extra principal payments.
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Formula
n_new = -log(1 - (P_rem × r) / M_new) / log(1 + r)n_new- New number of remaining months
P_rem- Remaining principal balance
r- Monthly interest rate
M_new- New monthly payment (original + extra)
Example
Impact of an Extra $200 per Month
Paying off a $200,000 remaining balance at 5% with 25 years left.
- Original monthly payment (Principal & Interest): $1,169.18.
- Add $200 extra payment: New payment is $1,369.18.
- Calculate new term: The loan will be paid off in 218 months (18.1 years) instead of 300 months.
- Calculate savings: Total interest drops from $150,753 to $98,481, saving $52,272.
Frequently Asked Questions
Yes, if you specify that the extra payment is for the principal, it immediately reduces your balance without prepaying future interest.
This depends on the interest rates. If your mortgage rate is 3% but you can earn 7% in the stock market, investing might yield higher net wealth. If your mortgage rate is 7%, paying it off offers a guaranteed 7% return.
Yes, applying a one-time lump sum reduces the principal immediately, which decreases the total interest charged over the remaining life of the loan and shortens the payoff time.