Mortgage Payoff Calculator
See your new payoff date and how much interest you'll save with extra monthly payments and a one-time lump sum.
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February 2041
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Last updated: August 6, 2026 · Reviewed by the DoCalc team
How Extra Mortgage Payments Work
A standard mortgage payment covers that month's interest, plus a fixed slice of principal — same total payment every month, but a shifting split between the two. Any amount paid beyond that fixed payment, when applied directly to principal, comes off the balance immediately. Since next month's interest is calculated on that now-smaller balance, every extra dollar keeps saving you interest for as long as the loan would otherwise have run — which is why extra payments made early in a loan save dramatically more than the same amount paid near the end.
This calculator models two ways to pay extra: a recurring extra monthly payment added on top of your regular payment every month, and a one-time lump sum applied immediately to reduce your balance right now. You can use either one alone or combine both.
How the Calculation Works
There's no simple formula once extra payments enter the picture — unlike a standard fixed payment, the payoff timeline with extra payments has to be simulated month by month: each month, interest is charged on the current balance, your regular payment plus any extra monthly amount is applied, and the remainder reduces principal, repeating until the balance hits zero. The lump sum is applied once, immediately, before that simulation begins.
Worked Example
A $250,000 remaining balance, 6.5% rate, 22 years (264 months) remaining, with a $10,000 lump sum now and $300 extra every month:
The combination of a lump sum and modest extra monthly payments here cuts nearly 7 years off the loan and saves over $83,000 in interest — a substantial result from redirecting a relatively modest amount of extra cash toward principal.
Lump Sum vs. Extra Monthly: When Each Wins
| Approach | Best when |
|---|---|
| Lump sum only | You have a windfall (bonus, inheritance, tax refund) and want an immediate, one-time balance reduction |
| Extra monthly only | You have steady extra cash flow but no large sum available upfront |
| Both combined | You want the fastest payoff for whatever total extra amount you're able to commit |
Who Should Use This Calculator
Use it if you're deciding whether — and how — to pay extra on an existing mortgage, and want to see the real payoff-date and interest-savings impact before committing.
Also consider the trade-off against other uses for that money — retirement contributions, an emergency fund, or higher-interest debt often deserve priority over extra mortgage payments, especially if your mortgage rate is relatively low.
Common Mistakes to Avoid
The most common mistake is sending extra money to your lender without confirming it's applied directly to principal — many lenders apply extra amounts to your next payment by default unless you specify otherwise, which doesn't accelerate payoff the way you'd expect. A second mistake is not checking for a prepayment penalty before making a large lump-sum payment, though these are increasingly rare on conventional US mortgages.
Worth knowing: a "biweekly" payment plan (half your monthly payment every two weeks) results in 26 half-payments per year — the equivalent of 13 monthly payments instead of 12 — which is a common, low-friction way to make the equivalent of one extra monthly payment annually without a large one-time cash outlay.
Expert Recommendation
Before committing to extra mortgage payments, compare your mortgage's interest rate to what you could reasonably expect from other uses of that money (paying down higher-rate debt, retirement contributions with an employer match, or investing) — extra mortgage payments are most clearly worthwhile when your mortgage rate is relatively high or you specifically value the certainty of a risk-free, guaranteed return.
Frequently Asked Questions
How does an extra mortgage payment shorten the loan?
Extra amounts applied to principal reduce the balance that all future interest is calculated on. Since your regular payment stays the same but more of it goes to principal (because less is owed in interest), the loan pays off faster than its original schedule.
Is it better to pay a lump sum or extra monthly?
A lump sum paid now reduces the balance immediately, saving interest from that point forward. Consistent extra monthly payments compound similarly over time. Combining both — an upfront lump sum plus smaller ongoing extra payments — typically shortens the loan the most for a given total amount of extra money.
Should I pay off my mortgage early or invest the extra money?
It depends on your mortgage rate versus expected investment returns. If your mortgage rate is lower than what you'd reasonably expect from investing, investing the difference often wins financially — but paying off a mortgage early has a guaranteed, risk-free return equal to your interest rate, which some people value for the certainty and peace of mind.
Are there prepayment penalties on mortgages?
Prepayment penalties are rare on conventional US mortgages today, but not universal. Check your loan documents before making a large extra payment to confirm there's no penalty for paying ahead of schedule.
Do I need to tell my lender an extra payment goes to principal?
Often yes — many lenders apply extra payments to the next month's payment by default unless you specify it should go directly to principal. Check your lender's process (a note on the payment, an online portal option, or a phone call) to make sure extra payments actually reduce your balance.
How much does one extra payment per year save?
On a typical 30-year mortgage, one full extra payment per year (spread as roughly 1/12th extra each month, or paid as a single annual lump sum) commonly shortens the loan by 4-6 years and saves a meaningful five-figure amount in interest, depending on the balance and rate.
Conclusion
Extra mortgage payments compound the same way debt does — just in your favor. A modest, consistent extra amount, or a one-time lump sum, can shave years off a loan and tens of thousands off its total interest — worth running the real numbers on before deciding it's worth diverting money away from other goals.