A mortgage is typically the largest debt most people will ever undertake. Understanding how to pay it off faster can save you significant amounts of money in interest over the life of the loan and free up your finances sooner. This Mortgage Payment Payoff Calculator helps you visualize the impact of making extra payments on your mortgage.
How the Calculation Works
The calculator uses standard mortgage amortization formulas, with the addition of an extra monthly payment to determine the accelerated payoff timeline.
Monthly Interest Rate: Calculated by dividing the annual interest rate by 12.
Standard Monthly Payment: Calculated using the formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Standard Monthly Payment
P = Principal Loan Amount
i = Monthly Interest Rate (Annual Rate / 12)
n = Total Number of Payments (Loan Term in Years * 12)
Total Monthly Payment: This is the standard monthly payment plus any extra monthly payment you choose to make.
Amortization with Extra Payments: The calculator simulates month-by-month payments. Each payment first covers the accrued interest for that month, and the remainder reduces the principal balance. When an extra payment is made, more of the principal is paid down each month, reducing the interest accrual in subsequent months and shortening the loan term.
Payoff Time: The calculator determines how many months it takes to bring the loan balance to zero with the total monthly payment. This is expressed in years and months.
Time Saved: This is the difference between the original loan term (without extra payments) and the new payoff time achieved with extra payments.
Total Paid & Total Interest Paid: These are calculated by summing up all payments made until the loan is fully paid off.
Why Make Extra Mortgage Payments?
Paying extra on your mortgage, even a small amount consistently, offers several significant benefits:
Save Money on Interest: This is the most substantial benefit. By reducing the principal balance faster, you pay less interest over the life of the loan. This can amount to tens of thousands of dollars saved.
Become Mortgage-Free Sooner: Imagine paying off your 30-year mortgage in 20 or even 15 years. This frees up your cash flow significantly for other financial goals like retirement, investments, or other purchases.
Build Equity Faster: A larger portion of your payments goes towards principal, meaning your ownership stake (equity) in your home grows more rapidly.
Peace of Mind: Eliminating your largest debt can provide immense financial security and reduce stress.
Tips for Making Extra Payments
Consistency is Key: Even an extra $50 or $100 a month can make a difference over 15-30 years.
Lump Sum Payments: Consider making extra principal payments annually, perhaps from a bonus, tax refund, or other windfalls.
Round Up Payments: Simply round up your regular payment to the next hundred dollars.
Bi-Weekly Payments: While this calculator uses a direct extra monthly payment, a common strategy is bi-weekly payments. This results in 26 half-payments per year, equivalent to 13 full monthly payments (one extra full payment annually). Ensure your lender applies these extra funds directly to the principal.
Verify with Your Lender: Always ensure that any extra payment you make is clearly designated for the principal balance. Some lenders may automatically apply it to the next month's payment if not specified, which defeats the purpose of early payoff.
Using this calculator can empower you to make informed decisions about your mortgage and accelerate your journey to financial freedom.
function calculateMortgagePayoff() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var loanTermYears = parseFloat(document.getElementById("loanTermYears").value);
var extraPayment = parseFloat(document.getElementById("extraPayment").value);
var resultDiv = document.getElementById("resultValues");
var monthlyPaymentSpan = document.getElementById("monthlyPayment");
var totalPaidSpan = document.getElementById("totalPaid");
var totalInterestPaidSpan = document.getElementById("totalInterestPaid");
var payoffTimeSpan = document.getElementById("payoffTime");
var timeSavedSpan = document.getElementById("timeSaved");
// Clear previous results
monthlyPaymentSpan.textContent = "–";
totalPaidSpan.textContent = "–";
totalInterestPaidSpan.textContent = "–";
payoffTimeSpan.textContent = "–";
timeSavedSpan.textContent = "–";
if (isNaN(loanAmount) || isNaN(annualInterestRate) || isNaN(loanTermYears) || isNaN(extraPayment) ||
loanAmount <= 0 || annualInterestRate < 0 || loanTermYears <= 0 || extraPayment 0) {
standardMonthlyPayment = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
} else { // Handle 0% interest rate
standardMonthlyPayment = loanAmount / numberOfPayments;
}
var totalMonthlyPayment = standardMonthlyPayment + extraPayment;
var remainingBalance = loanAmount;
var months = 0;
var totalPaid = 0;
var totalInterest = 0;
// Amortization loop with extra payment
while (remainingBalance > 0) {
var interestPayment = remainingBalance * monthlyInterestRate;
var principalPayment = totalMonthlyPayment – interestPayment;
// Ensure principal payment doesn't exceed remaining balance + interest
if (principalPayment >= remainingBalance) {
principalPayment = remainingBalance;
totalMonthlyPayment = interestPayment + principalPayment; // Adjust the last payment
}
remainingBalance -= principalPayment;
totalPaid += totalMonthlyPayment;
totalInterest += interestPayment;
months++;
// Prevent infinite loops for very small payments or edge cases
if (months > loanTermYears * 12 * 10) { // Safety break, 10x original term
resultDiv.innerHTML = 'Calculation could not be completed due to extreme values or potential infinite loop.';
return;
}
}
// Calculate original total paid and interest without extra payment
var originalTotalPaid = standardMonthlyPayment * numberOfPayments;
var originalTotalInterest = originalTotalPaid – loanAmount;
// Format results
monthlyPaymentSpan.textContent = formatCurrency(totalMonthlyPayment.toFixed(2));
totalPaidSpan.textContent = formatCurrency(totalPaid.toFixed(2));
totalInterestPaidSpan.textContent = formatCurrency(totalInterest.toFixed(2));
var payoffYears = Math.floor(months / 12);
var payoffMonths = months % 12;
payoffTimeSpan.textContent = payoffYears + " year(s) " + payoffMonths + " month(s)";
var originalTotalMonths = loanTermYears * 12;
var timeSavedMonths = originalTotalMonths – months;
var timeSavedYears = Math.floor(timeSavedMonths / 12);
var timeSavedRemMonths = timeSavedMonths % 12;
timeSavedSpan.textContent = timeSavedYears + " year(s) " + timeSavedRemMonths + " month(s)";
}
function formatCurrency(amount) {
return "$" + amount.toString().replace(/\B(?=(\d{3})+(?!\d))/g, ",");
}