What does mortgage payoff save?
See how much sooner extra payments pay off your mortgage, and how much interest they save.
- Paid off sooner by
- 5 years
Paying extra on this $300,000.00 mortgage pays it off 5 years sooner and saves $66,943.94 of interest.
- Interest saved
- $66,943.94
- Balance today
- $280,832.93
- Monthly payment
- $1,896.20
- Payments left with extra
- 240
- Payments left without extra
- 300
- Interest left with extra
- $221,084.34
- Interest left without extra
- $288,028.29
- New payoff month
- August 2046
- Months
- 240
Answer for the example date Tuesday, September 29, 2026. It changes to today's date when the page loads.
Paid off sooner by: 5 years. Paying extra on this $300,000.00 mortgage pays it off 5 years sooner and saves $66,943.94 of interest.
How much sooner does the balance reach zero?
Where does each year of payments go?
What does every payment from now look like?
The results are estimates for information only. They are not financial, tax, or legal advice. Check the numbers with your lender or a qualified professional before you decide. Terms of use
How to calculate
Computes how much sooner extra monthly, yearly, or lump-sum payments pay off a fixed-rate mortgage, and the interest they save, from the original loan and the payments already made.
Example with the default inputs (Original loan amount $300,000.00, Interest rate 6.5%, Original term (years) 30, Payments made so far 60, Extra each month $200.00, Extra each year $0.00, Lump sum now $0.00, Next payment month September 29, 2026) on the example date Tuesday, September 29, 2026: Paying extra on this $300,000.00 mortgage pays it off 5 years sooner and saves $66,943.94 of interest.
Method: payment P = A × r ÷ (1 − (1 + r)^−N); balance today B = A(1 + r)^k − P((1 + r)^k − 1) ÷ r after k payments; from today, each month interest = balance × r and P plus any extra, minus the interest, lowers the balance.
- The rate is fixed and every payment so far was made on time, so the balance today is the scheduled balance.
- Interest is charged monthly at the rate ÷ 12; the extra goes straight to the balance.
- The yearly extra is paid with payments 12, 24, 36, … from now; the lump sum with the next payment.
- Taxes, insurance, and mortgage insurance are not included.
- Values are not rounded to the cent between months; only the display is rounded.
Worked examples
Each example is checked against the calculator on every build.
- Original loan amount $300,000.00, Interest rate 6.5%, Original term (years) 30, Payments made so far 60, Extra each month $200.00 gives Monthly payment $1,896.20, Balance today $280,832.93, Payments left with extra 240, Paid off sooner by 5 years, Interest saved $66,943.94.Source: hand calculation in content.mdx; Python 3 in docs/progress/WP-31/python/mortgage_payoff.py
- Original loan amount $120,000.00, Interest rate 0%, Original term (years) 20, Payments made so far 120, Extra each month $0.00, Lump sum now $10,000.00, Next payment month 2026-11-01 gives Balance today $60,000.00, Payments left with extra 100, Paid off sooner by 1 year, 8 months, Interest saved $0.00, New payoff month 2035-02-01.Source: hand calculation in content.mdx: at 0% the balance is 120,000 − 120 × 500
- Original loan amount $200,000.00, Interest rate 5%, Original term (years) 15, Payments made so far 24, Extra each month $0.00, Extra each year $2,000.00, Lump sum now $5,000.00 gives Payments left without extra 156, Payments left with extra 132, Interest saved $12,114.65, Interest left with extra $53,458.42.Source: month by month in Python (docs/progress/WP-31/python/mortgage_payoff.py), rule in content.mdx
How it works
Write A for the original loan, r for the rate ÷ 12 (as a decimal), N for the original number of payments (years × 12), and k for the payments made so far (k must be less than N).
- Payment: P = A × r ÷ (1 − (1 + r)^−N). At 0%, P = A ÷ N.
- Balance today: the scheduled balance after k payments, B = A(1 + r)^k − P((1 + r)^k − 1) ÷ r. At 0%, B = A − k × P.
- Payments left on the original schedule: N − k. The interest left without extra payments is (N − k) × P − B.
- From today, month by month for payment number j = 1, 2, 3, …: interest = balance × r; extra = the monthly extra, plus the yearly extra when j is a multiple of 12, plus the lump sum when j = 1. If j = N − k, or P + extra − interest is at least the balance, this payment clears the balance; otherwise the balance falls by P + extra − interest.
- Results: payments left with extra is the number of months in step 4; "Paid off sooner by" is (N − k) minus that, shown in years and months; the interest left with extra is the sum of the monthly interest; "Interest saved" is the interest left without extra minus it (0 when no extra amount is entered).
The next payment is in the month you enter, so the new payoff month is (payments left with extra − 1) months later.
Assumptions
- The rate is fixed and every payment so far was made on time with no extra, so today's balance is the scheduled one.
- Interest is charged monthly at the rate ÷ 12, and extra payments go straight to the balance.
- Only principal and interest are counted; taxes, insurance, and mortgage insurance are not included.
- Values are not rounded to the cent between months; only the display is rounded.
Worked examples by hand
$300,000 at 6.5% over 30 years, 60 payments made, $200 extra a month. r = 0.065 ÷ 12 = 0.0054167 and (1 + r)^−360 = 0.143025, so P = 300,000 × 0.0054167 ÷ 0.856975 = $1,896.20. (1 + r)^60 = 1.382817, so the balance today is 300,000 × 1.382817 − 1,896.204 × 0.382817 ÷ 0.0054167 = 414,845.20 − 134,012.26 = $280,832.93. Without extra, 300 payments are left with 300 × 1,896.204 − 280,832.93 = $288,028.29 of interest. With $2,096.20 a month the balance runs out after 240 payments, 5 years sooner, with $221,084.34 of interest, so the extra saves $66,943.94.
$120,000 at 0% over 20 years, 120 payments made, a $10,000 lump sum now, next payment November 2026. P = 120,000 ÷ 240 = $500 and the balance is 120,000 − 120 × 500 = $60,000. The first payment of $10,500 leaves $49,500, which 99 more payments of $500 clear: 100 payments, 20 fewer than 120, which is 1 year and 8 months sooner. There is no interest to save ($0). The last payment is 99 months after November 2026: February 2035.
$200,000 at 5% over 15 years, 24 payments made, $2,000 extra each year and $5,000 now. r = 0.05 ÷ 12 and (1 + r)^−180 = 0.473103, so P = $1,581.59; (1 + r)^24 = 1.104941 gives a balance of $181,154.54 with 156 payments left. Running the monthly rule with $5,000 on payment 1 and $2,000 on payments 12, 24, 36, …, the loan ends after 132 payments with $53,458.42 of interest, against $65,573.08 without extra: $12,114.65 saved.
Other questions people ask
How much sooner will extra payments pay off my mortgage?
Each extra dollar goes straight to principal, so every later month charges less interest and more of the regular payment lowers the balance. On a $300,000 mortgage at 6.5% over 30 years, five years in, paying $200 more a month ends it 5 years sooner and saves $66,943.94 of interest.
Do I need my current balance?
No. Enter the original loan, rate, term, and the number of payments you have made; the page works out the scheduled balance. If you have paid extra before, your real balance is lower than that, and the payoff will come sooner still.
Is a lump sum or a monthly extra better?
Money paid earlier saves more interest, because it stops interest from building on it for longer. A lump sum now saves more than the same total spread over later months. The best choice depends on your cash and other goals.
Should I pay off my mortgage early or invest?
Paying extra earns, in effect, your mortgage rate with no risk. Investing may earn more or less. Many people first build an emergency fund, pay off higher-rate debt, and take any employer retirement match before paying extra on a mortgage.
Will my lender charge a penalty for paying early?
Some mortgages have a prepayment penalty, usually for paying off the whole loan within the first few years. The CFPB notes it does not normally apply to paying extra principal in small amounts. Check your loan papers.
Does paying extra lower my monthly payment?
No. The payment stays the same and the loan ends sooner. To lower the payment after a large lump sum, ask your lender about a recast (see the mortgage recast calculator).