See how extra monthly payments and lump sums can cut years off your loan and save thousands in interest, or set a payoff goal and get the exact extra payment required.
Free mortgage payoff planner: add extra monthly payments, a yearly 13th payment, or a one-time lump sum. Or flip to goal mode and solve for the extra payment that pays your loan off by a target year.
Direct answers to the most common questions, in plain language. Skim if you're in a hurry; dig deeper below.
About $828/month on a $350,000 loan at 6.75%.
Switch the calculator to "I have a payoff goal" and set 15 years: it solves for the exact extra payment. On a $350,000 balance at 6.75% with 30 years left, you need roughly $828 extra per month on top of the $2,270 payment, which wipes out about $260,000 of lifetime interest.
Yes, typically by 4 to 6 years on a 30-year loan.
Making one extra monthly payment every year goes straight to principal. On a typical 30-year loan at 6.75%, this single habit shortens the loan by 4 to 6 years and cuts total interest by 15 to 20%.
Yes. Interest is calculated on the remaining principal.
Mortgage interest is calculated on the outstanding principal each month. When you prepay, the principal drops immediately, and every future interest calculation uses the new, lower number.
Shorten the term to save more interest.
Keeping your payment the same and shortening the term saves significantly more interest than recasting to a lower payment. Choose term reduction if your income is stable; choose a lower payment if you need monthly cash-flow relief.
Rarely, on US mortgages originated after 2014.
Most US mortgages made under the post-2014 qualified-mortgage rules carry no prepayment penalty; you can pay extra any time. A small number of loans charge a fee for early payoff in the first few years. Check your loan estimate or promissory note.
The mechanics in short answers. No jargon, no upsell.
Lenders apply your interest rate to whatever you still owe, every month. Early in the loan, your principal is huge, so most of your monthly payment goes to interest.
Any amount above your regular payment goes 100% to principal. The next month, interest is calculated on the new, smaller number, and so does every month after that.
An extra payment in year 2 of a 30-year loan saves multiples of what the same amount saves in year 25. Time is the multiplier.
Give it a payoff year and it searches your exact amortization schedule for the smallest extra monthly payment that hits the date, no guess-and-check.
Worked example: On a $350,000 loan at 6.75% for 30 years: r = 0.005625, n = 360, so the monthly payment ≈ $2,270. Every extra dollar you pay goes 100% to principal, which removes all the future interest that dollar would have accrued. That is why small extras cut whole years off the end of the schedule.
We simulate your loan month by month (applying monthly extras, yearly 13th payments, and lump sums exactly when they happen) rather than using a closed-form shortcut. The payoff-goal mode runs a binary search over the same simulation to find the smallest extra payment that hits your target date. Everything runs locally in your browser; your numbers never leave this page.
Designed so anyone can model their situation in under a minute, with or without a finance background.
Cut 15-35% off the total interest you would otherwise pay over the life of the loan.
Shave 3-8 years off a typical 30-year term with modest, sustainable extra payments.
A smaller outstanding loan means lower risk if your income changes or rates rise.
Watching your debt-free date move forward is its own compounding reward.
Every extra dollar goes straight to principal, growing the stake you actually own.
Once the loan ends early, that monthly payment returns to your budget, for years.
Everything you might ask before, during, or after using this tool.
Compare your mortgage rate to your realistic after-tax investment return. If your loan rate is meaningfully higher, prepay. If you have high conviction that markets will outperform after tax and fees, invest. For most borrowers with mortgage rates above 6%, extra payments are the mathematically stronger choice.
Yes, almost always. Keeping your payment fixed and shortening the term saves much more interest because you keep paying at the original pace against a shrinking balance. A recast lowers your monthly outflow but stretches the loan and increases total interest paid.
Most US mortgages have no prepayment penalty; you can pay any extra amount, any number of times. A small share of loans charge a fee for paying off within the first few years. Confirm in your loan estimate or promissory note.
You keep deducting the mortgage interest you actually pay each year (if you itemize). Paying extra shrinks future interest, and with it the deduction, but keeping a loan just for the tax break never comes out ahead: you pay a dollar of interest to save a fraction of it in tax.
Yes. Most servicers let you add a principal-only amount to any payment through their online portal or by check memo. Small, regular extras work just as well as a single large one; what matters is reducing principal early. Mark the extra as principal-only so it is not held as a prepaid installment.
A one-time amount you pay above your scheduled payment, from a bonus, tax refund, or windfall. It is applied directly to your outstanding principal, which then reduces every future month's interest calculation. Most servicers apply it within 1-2 business days.
No. By default your payment stays the same and the loan simply ends earlier. If you want the payment itself lowered, ask your servicer for a recast (re-amortization), which usually costs a small fee and keeps your rate and term.
Extra mortgage payments are a guaranteed, risk-free return equal to your loan rate. Investing is variable, taxed, and has costs. If your loan rate is higher than your after-tax expected investment return, prepay. A 50/50 split is also a reasonable strategy if you cannot decide.
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The best time to pay extra is the first half of your loan's life. That is when the monthly payment is still mostly interest, and a single dollar of principal removed compounds into many dollars of saved interest. If you're past the midpoint, extra payments still help, but the leverage shrinks each year.
Don't prepay if it means draining your emergency fund. Three to six months of expenses, liquid and untouched, comes first. Extra mortgage payments second.
The math is unromantic. Subtract tax from your expected investment return. If that net number is meaningfully higher than your mortgage rate, say, by 2 percentage points or more, invest. If it isn't, pay down the loan. With mortgage rates above 6% in 2026, the bar for "investing wins" is high.
For most people, the right answer is "both, but not equally." A 70/30 split toward the mortgage for risk-averse savers, or 30/70 toward investing for younger earners with high risk tolerance, are both reasonable.
Dramatically. An extra payment in year 2 of a 30-year loan at 6.75% saves several multiples of what the same amount saves in year 25. Time is the multiplier, and the calculator above quantifies your specific case.
By default, your servicer keeps the monthly payment the same and the loan pays off earlier. The amortization schedule is recomputed, and you'll see the remaining term drop on your next statement. If you'd rather have a lower monthly payment than a shorter loan, ask your servicer about a recast; it re-amortizes the smaller balance over the original term, usually for a small fee.
Two short notes worth reading before you trust any number on this page.
Your loan amount, rate, and prepayment inputs never leave your device. No accounts, no cookies on your numbers, no analytics on the values you type. Disconnect from the internet and it still works.
We are not a bank, NBFC, advisor, broker, or distributor of any financial product. The numbers shown here are estimates for educational purposes only, based on the inputs you provide.
Results are not financial, legal, or tax advice. Please consult a qualified professional before any decision about your loan, investments, or personal finances. Actual loan terms and charges depend on your bank and individual circumstances.
