Calculate how much time and interest you can save by making extra monthly payments.
Standard Monthly Payment:
Total Interest (Standard):
Total Interest (With Extra):
Total Interest Saved:
Time Saved:
New Payoff Time:
How to Accelerate Your Mortgage Payoff
Paying off a mortgage early is one of the most effective ways to build long-term wealth and achieve financial freedom. Even a modest extra payment each month can drastically reduce the total interest paid over the life of the loan. This Mortgage Payoff Calculator helps you visualize the direct impact of additional principal payments.
Understanding the Power of Amortization
In the early years of a mortgage, the majority of your monthly payment goes toward interest rather than principal. By adding just a few hundred dollars to your monthly payment, you apply those funds directly to the principal balance. This reduces the base upon which interest is calculated for every subsequent month, creating a compounding effect of savings.
Key Strategies for Early Payoff
Monthly Add-ons: Adding a fixed amount like $100 or $500 to your regular payment.
Bi-Weekly Payments: Paying half your mortgage every two weeks results in 13 full payments per year instead of 12.
Lump Sum Payments: Applying tax refunds or work bonuses directly to the principal balance.
Recasting: If you make a large lump sum payment, some lenders allow you to "recast" the loan to lower the monthly payment while keeping the original interest rate.
Real-World Example
Consider a $300,000 mortgage at a 7% interest rate with 30 years remaining. Your standard payment (principal and interest) would be approximately $1,996. By paying an extra $300 per month:
You save over $160,000 in total interest charges.
You pay off your home nearly 8 years earlier.
You effectively earn a "guaranteed return" equal to your interest rate on every extra dollar paid.
Should You Pay Off Your Mortgage Early?
While saving on interest is beneficial, consider your overall financial picture. If your mortgage rate is 3% and you can earn 7% in a diversified index fund, it may be mathematically superior to invest. However, for many, the psychological benefit of owning a home free and clear—and the elimination of the monthly housing expense—outweighs the potential spread in investment returns.
function calculateMortgagePayoff() {
var balance = parseFloat(document.getElementById('mortgage_balance').value);
var annualRate = parseFloat(document.getElementById('interest_rate').value);
var years = parseFloat(document.getElementById('remaining_years').value);
var extra = parseFloat(document.getElementById('extra_payment').value);
if (isNaN(balance) || isNaN(annualRate) || isNaN(years) || balance <= 0) {
alert("Please enter valid positive numbers for balance, rate, and years.");
return;
}
var monthlyRate = annualRate / 100 / 12;
var totalMonths = years * 12;
// Calculate standard payment
var standardPayment = balance * (monthlyRate * Math.pow(1 + monthlyRate, totalMonths)) / (Math.pow(1 + monthlyRate, totalMonths) – 1);
if (!isFinite(standardPayment)) {
standardPayment = balance / totalMonths; // 0% interest case
}
// Standard Payoff Simulation
var tempBalanceStd = balance;
var totalInterestStd = 0;
for (var i = 0; i 0 && monthsExtra tempBalanceExtra) {
tempBalanceExtra = 0;
} else {
tempBalanceExtra -= principalPaid;
}
monthsExtra++;
}
// Formatting
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
});
var timeSavedMonths = totalMonths – monthsExtra;
var yearsSaved = Math.floor(timeSavedMonths / 12);
var extraMonthsSaved = timeSavedMonths % 12;
var timeSavedStr = "";
if (yearsSaved > 0) timeSavedStr += yearsSaved + " years ";
if (extraMonthsSaved > 0) timeSavedStr += extraMonthsSaved + " months";
if (timeSavedMonths <= 0) timeSavedStr = "0 months";
var newYears = Math.floor(monthsExtra / 12);
var newMonths = monthsExtra % 12;
// Display results
document.getElementById('results_box').style.display = 'block';
document.getElementById('standard_payment').innerText = formatter.format(standardPayment);
document.getElementById('total_interest_standard').innerText = formatter.format(totalInterestStd);
document.getElementById('total_interest_extra').innerText = formatter.format(totalInterestExtra);
document.getElementById('interest_savings').innerText = formatter.format(totalInterestStd – totalInterestExtra);
document.getElementById('time_saved').innerText = timeSavedStr;
document.getElementById('new_term').innerText = newYears + " years, " + newMonths + " months";
}