Mortgage Payoff Calculator
Calculate how much time and money you can save by making extra payments on your mortgage. See the impact of additional principal payments on your loan payoff timeline.
Mortgage Information
Calculated payment: $1,688
Extra Payment Options
Payoff Comparison
Current Loan Schedule
With Extra Payments
Your Savings
How Mortgage Payoff Works
Extra Principal Payments
When you make extra payments toward the principal balance of your mortgage, you reduce the amount of money on which interest is calculated. This can significantly reduce both the total interest paid and the time needed to pay off the loan.
- Extra payments go directly to principal
- Reduces future interest calculations
- Shortens loan term
- Builds equity faster
Payment Strategies
There are several strategies for making extra mortgage payments:
- Monthly: Add extra amount to each payment
- Annual: Make one large payment per year
- Bi-weekly: Pay half monthly payment every two weeks
- Lump sum: Use windfalls like bonuses or tax refunds
Benefits of Paying Off Your Mortgage Early
Interest Savings
Save thousands in interest payments over the life of the loan
Peace of Mind
Eliminate monthly mortgage payments and reduce financial stress
Build Equity
Increase home equity faster for future financial opportunities
Early Freedom
Achieve financial freedom years ahead of schedule
Example Calculation
$250,000 Mortgage at 6.5% with 25 Years Remaining
Current Schedule
With $200 Extra Monthly
Frequently Asked Questions
Should I pay off my mortgage early or invest the money?
This depends on your mortgage interest rate versus potential investment returns. If you can earn more than your mortgage rate through investments, it may be better to invest. However, paying off your mortgage provides guaranteed savings and peace of mind.
Will I lose the mortgage interest tax deduction?
Yes, paying off your mortgage early means you'll lose the mortgage interest tax deduction. However, the actual benefit of this deduction is often less than the interest savings from early payoff, especially with the higher standard deduction.
What's the best strategy for extra payments?
The most effective strategy is to make extra payments toward the principal as early as possible in the loan term. Even small additional payments in the early years can save significant interest over time.
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