Early Mortgage Payoff Calculator — Save Interest by Paying More

Current loan balance

Annual interest rate

Remaining term

Extra monthly payment

Time saved

Interest saved

Without extra payments

Monthly payment

Payoff date

Total interest

Total cost

With extra payments

Monthly payment

Payoff date

Total interest

Total cost

About the Early Payoff Calculator

What it calculates

Shows you how much interest you save and how many months sooner you pay off your mortgage by making regular extra payments on top of your standard monthly payment.

How extra payments help

Extra payments reduce the outstanding principal directly. Since interest is charged on the remaining balance, a lower balance means less interest accrues each month — compounding the benefit over time.

Extra payment amount Even a small monthly overpayment can cut years off a mortgage and save tens of thousands in interest on a typical loan.
Lump sum vs monthly A regular monthly extra payment is more effective than an equivalent annual lump sum because the balance reduces sooner.

Strategies for paying off a mortgage early

Overpaying a mortgage is one of the highest guaranteed returns available because you save interest at the mortgage rate (which is typically higher than savings rates after tax). However, if your mortgage rate is below your investment return after tax, investing the overpayment amount may produce better long-term results. The break-even depends on your specific mortgage rate, tax situation, and investment horizon.

10% overpayment rule — most fixed-rate deals allow up to 10% of balance per year without ERCs
Offset mortgage — savings offset against mortgage balance reducing interest without reducing liquidity
Mortgage vs investment — if mortgage rate < expected investment return after tax, investing may be better
Lump sum vs regular — a lump sum overpayment saves the most interest; regular overpayments improve cash flow flexibility

Frequently Asked Questions

Do extra payments go to principal or interest?

Extra payments typically go directly toward reducing the principal balance (after the regular interest for that period is covered). This is what accelerates payoff and reduces total interest — but check your mortgage terms to confirm your lender applies extras to principal.

When is the best time to make extra payments?

Early in the loan term, when your balance is highest. Extra payments made in year 1–5 have a disproportionately large impact because they reduce the base on which all future interest accrues.

How much interest does an extra monthly payment save?

It depends on your loan balance and interest rate, but even a small extra monthly payment can save thousands over the life of a loan. This is because early payments reduce the principal, so all future interest is calculated on a smaller amount.

Should I make extra principal payments or put money into savings?

Compare your mortgage interest rate to your savings interest rate. If your mortgage rate is higher than what savings accounts offer, paying down the mortgage typically provides a better guaranteed return.

What is the best way to make an extra payment?

Always confirm with your lender that extra payments will be applied directly to the principal balance rather than counted as an advance on future scheduled payments. Specify "principal only" when making extra payments.