Mortgage Payoff Calculator
How much do extra payments save on your mortgage? Calculate interest saved with extra monthly payments, a one-time lump sum, or find the monthly payment needed to pay off by a target date.
Try a scenario
How to Use This Calculator
Tab "Extra Monthly" (lightning bolt)
Enter your remaining balance, annual interest rate, and remaining term. Then add your extra monthly payment. The calculator shows how many years and months you save, the interest saved, and a visual comparison of remaining balance over time with and without the extra payment.
Tab "Lump Sum" (money bag)
Same three shared inputs, plus a one-time lump sum you can pay right now. The calculator applies that amount directly to principal and shows the new payoff timeline and total interest saved.
Tab "Payoff by Date" (target)
Enter your mortgage details and a target payoff time in years. The calculator tells you the exact monthly payment required to hit that date — and how much interest you would save compared to the full original term.
The Formula
PMT = P × r_m × (1 + r_m)^n / ((1 + r_m)^n − 1)
where P = remaining balance, r_m = annual rate / 12, n = remaining months
Interest saved by extra payments:
Interest saved = Total interest (original) − Total interest (with extra payments)
Simulation method:
Each month: interest = remaining balance × r_m
Payment applied: base PMT + extra amount
New balance = old balance + interest − payment
Repeat until balance reaches zero.
Lump sum:
Applied immediately to reduce the principal before the first month's simulation.
All calculations use standard amortisation mathematics. No country-specific rules, taxes, or fees are included.
Worked Examples
Example 1 — Extra Monthly: $280K at 5.5%, 25 years remaining, +$300/month
A homeowner has $280,000 remaining at 5.5% with 25 years left. They start paying an extra $300/month on top of the standard payment.
An extra $300/month — less than $10/day — cuts 6.6 years off the mortgage and saves $89,412 in interest. The savings are large because every dollar of extra payment directly reduces the principal, compounding the benefit through all future periods.
Example 2 — Lump Sum: $20,000 on same mortgage
The same homeowner receives a $20,000 bonus and pays it off the mortgage as a one-time lump sum (in addition to regular payments, no extra monthly).
A $20,000 lump sum saves $112,308 over the life of the mortgage — a return of more than 5x on the upfront payment. This is because the $20,000 would have attracted 5.5% interest compounding for up to 25 years.
Example 3 — Payoff by Date: $280K at 5.5%, want to clear in 10 years
The homeowner wants to be mortgage-free in 10 years instead of 25. What monthly payment is required?
Paying $3,042/month instead of $1,710 saves over $160,000 in total interest and frees the homeowner from mortgage payments 15 years early.
Why Extra Payments Save So Much
The Compounding Interest Effect — in Reverse
Mortgages work by charging interest on the outstanding balance every month. In the early years, most of your payment goes toward interest, not principal. When you make extra payments, you reduce the principal directly — which means every future month charges interest on a smaller amount. This creates a cascade: lower principal today means lower interest next month, which means more of your standard payment goes to principal, which further accelerates the payoff.
Front-Loading is More Powerful
Extra payments made early in the mortgage save significantly more than the same amount paid later. A $10,000 overpayment in year 2 may save $25,000 in interest; the same $10,000 in year 20 might save only $3,000. This is because the early payment avoids compounding interest charges over 20+ remaining years, while a late payment has fewer years of interest ahead of it.
Lump Sum vs Monthly: Which Is Better?
Both work. A lump sum has an immediate, larger impact — it reduces principal in a single step, saving all future interest on that amount from day one. Regular extra monthly payments are more accessible and build a sustainable habit. If you have both a lump sum and can commit to monthly extras, combining them produces the best outcome. The calculator's "Extra Monthly" and "Lump Sum" tabs let you model each independently.
Overpayment Limits
Many lenders — especially in the UK and some European markets — cap annual overpayments (often at 10% of the outstanding balance) without penalty. Exceeding this may trigger an early repayment charge. Always verify with your lender before making large overpayments. The US, Australia, and New Zealand often have more flexible overpayment policies. This calculator does not model lender-specific caps — treat the results as the maximum theoretical saving.
Frequently Asked Questions
Country-Specific Mortgage Calculators
For calculators that include local mortgage rules, taxes, and products: