Mortgage Payoff Calculator

Quick Answer

Last updated: 2 November 2026 ·How we calculate this: monthly amortization with extra principal

How This Mortgage Payoff Calculator Works

Use this calculator for a mortgage you already have. Enter what you still owe, your rate and your monthly principal and interest payment. It counts the months left, adds up the interest, and shows what an extra monthly payment would save.

How to Use the Mortgage Payoff Calculator

1. Find your current loan balance on your latest statement and enter it.
2. Enter your interest rate and your monthly principal and interest payment.
3. Optionally, enter an extra amount you could add each month.
4. Optionally, enter the number of years in which you want to be mortgage-free.
5. Press Calculate to see the time left, interest left and your savings.

Core Formulas

• Monthly interest: balance × annual rate ÷ 12
• New balance: balance + interest − payment − extra
• Payment for a target: P = B × r ÷ (1 − (1 + r) ^ −n)

B is the balance, r is the monthly rate and n is the number of months to your target.

Key Terms

• Principal: the amount you still owe on the loan, not counting interest.
• Escrow: money your lender collects with each payment for property tax and insurance.
• Amortization: paying off a loan with regular payments that cover interest and principal.
• Payoff amount: the exact sum needed to close the loan on a given day, including daily interest.

Worked Example

You owe $180,000 at 5.75% and pay $1,400 a month. You add $300 a month.

• Without extra: 16 years, 9 months left, with $100,368 of interest
• With $300 extra: 12 years, 5 months left, with $71,774 of interest
• You save $28,594 and finish 4 years, 4 months sooner

Real-Life Examples

• Mortgage-free in 15 years: on $250,000 at 6.5%, you would need to pay $2,177.77 a month, about $378 more than $1,800.
• One extra payment a year: paying $150 extra each month is the same as one extra $1,800 payment a year. On the example loan, it saves about $37,043 in interest.
• Using a raise: putting a $100 monthly raise toward the mortgage saves about $26,326 on the example loan.
• Close to the end: with $40,000 left at 4% and $1,200 a month, you have 3 years to go.

Paying Off a Mortgage Early vs Investing

• Paying early: a guaranteed return equal to your mortgage rate, and no monthly payment once it is gone.
• Investing: may earn more over time, but returns are not guaranteed.
• Rate matters: early payoff is more attractive when your mortgage rate is high.
• Balance both: many people do some of each, after building an emergency fund.

Interest Saved by Extra Payment

For a $250,000 balance at 6.5% with a $1,800 monthly payment.

Before You Pay Extra

• Emergency fund: keep savings for surprises before sending extra to the mortgage.
• Higher-rate debt: credit cards and personal loans usually cost more than a mortgage.
• Retirement match: an employer 401(k) match is often worth more than early payoff.
• Prepayment rules: most US home loans allow extra payments, but check your loan terms.

Common Mistakes to Avoid

• Entering the full payment with escrow. Use principal and interest only.
• Not marking extra money as principal. Ask your lender to apply it to principal, not future payments.
• Draining savings to pay early. Home equity is hard to access in an emergency.
• Ignoring higher-rate debt. Pay off costly debt first.
• Forgetting refinancing. If rates have dropped a lot, a refinance may save more.

Frequently Asked Questions

References & Sources