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What a payoff calculator is for
You do not need a spreadsheet to know that paying more shortens a loan. You need a number that tells you whether an extra $100, $250 or $500 a month is worth giving up other uses of the money. This calculator gives you that number and puts several amounts side by side so the trade is visible, along with the exact month your last payment lands.
How it works
Enter your balance, rate and the years remaining. The calculator works out your required payment from those figures, then re-runs your loan month by month with your extra amount and any lump sum added to principal. It compares the result to the no-extra path and reports interest saved, months saved and the new payoff date. The table underneath shows the same loan at $0, $100, $250, $500 and $1,000 extra.
How the savings are calculated
Each month, interest is balance × annual rate ÷ 12. Whatever is left of your payment and extra after interest reduces the balance. Next month's interest is charged on the smaller balance, so more of your regular payment becomes principal. The loop runs until the balance hits zero, and interest saved is the difference between that path and your original schedule.
Worked example: $280,000 at 6.5%, 28 years left
The required payment is $1,811.65 and the loan would cost $328,713 in interest if you paid only that. Add $100 a month: 24 years 4 months and $50,692 saved. Add $250: 20 years 7 months and $100,933 saved. Add $500: 16 years 6 months and $151,949 saved. The first $100 is the most efficient; savings per dollar shrink as the extra gets larger.
Before you send extra money
Order of priorities
A mortgage is usually cheaper debt than credit cards or personal loans, and locking cash into home equity makes it hard to reach. Most planners suggest an emergency fund and higher-interest balances first.
Check the fine print
Confirm that extras go to principal, that there is no prepayment penalty, and that you are not skipping employer retirement matching to do this.
Other ways to cut interest
If you pay every two weeks the payment schedule itself creates an extra payment each year; see the bi-weekly calculator. If you get a windfall and want a smaller payment instead of an earlier payoff, compare the recast calculator. A lower rate does a similar job; test it on the refinance calculator. See your starting payment on the main mortgage calculator.
Estimate only. Your servicer's payoff statement is the official figure.
Frequently asked questions
How much can extra payments really save me?
More than most people expect, because extra principal early in the loan removes interest for every remaining month. On a $280,000 balance at 6.5% with 28 years left, an extra $200 a month saves about $86,555 in interest and finishes the loan 6 years 4 months early.
Is one big payment better than small monthly extras?
The earlier the money hits the balance, the more interest it removes, so a lump sum now beats the same amount spread out over years. A one-time $10,000 on the same loan saves about $46,536 and shortens it by 31 months. Regular extras and a lump sum can be combined in the calculator.
How do I make sure my extra goes to principal?
Use your servicer's principal-only option online or write "principal" on the check. Otherwise some servicers treat extra money as an early payment on next month's bill, which does much less. Check your next statement to confirm the balance dropped by the extra amount.
Do mortgages have prepayment penalties?
Most modern home loans do not, but a few do, particularly certain non-qualified mortgages. Look for a "prepayment" section in your note or ask your servicer before making large payments.
Should I pay extra on my mortgage or invest instead?
Paying down a 6.5% mortgage is a guaranteed 6.5% return before tax, while investment returns are uncertain. The right answer depends on your rate, your cash cushion, other debts and your comfort with risk. A sensible order for many people is an emergency fund first, then high-interest debt, then this comparison.
Will extra payments lower my monthly payment?
No. Your required payment stays the same, and you finish sooner. If you want a lower payment after a large lump sum, ask about a recast, which is a different option.