Extra Payments Payoff Calculator

A mortgage is simple at its core: you owe a balance, and the bank charges interest on that balance each month. Your monthly payment covers the interest first, and anything left reduces the principal. When you add extra money to your payment, every dollar goes directly to principal. That means next month's interest is calculated on a smaller balance, so less goes to interest and more of your regular payment goes to principal. This cycle compounds, accelerating your entire payoff timeline.

On a $300,000 30-year loan at 6.5%, the monthly P&I is about $1,896. In month one, roughly $1,625 goes to interest and only $271 to principal. If you add $200 extra, that entire $200 goes to principal on top of the $271. Next month, you start from a lower balance, so interest drops slightly and your regular principal paydown increases. Over the life of the loan, that extra $200 per month adds up to about $103,000 in interest savings.

The earlier you start extra payments, the more powerful the effect. An extra $200 starting in year 1 saves about twice as much interest as starting the same amount in year 15. Time is your multiplier. This is why the chart above shows the accelerated line pulling away from the standard line early and never looking back.

There are three common ways to accelerate your mortgage payoff, and they can be combined:

• Extra monthly payment. Add a fixed amount to every payment. This is the most consistent approach. On a $300,000 loan at 6.5%, $200 extra saves about $103,000 and nearly 7 years. Even $50 per month saves about $34,000.
• Annual lump sum. Apply a larger amount once per year, typically from a bonus, tax refund, or side income. A $2,000 annual lump sum on the same loan saves about $87,000 and reduces the term by about 5 years and 11 months. The lump sum impacts the balance all at once, reducing subsequent interest charges after it is applied.
• Bi-weekly payments. Pay half your monthly P&I every two weeks. Because there are 52 weeks in a year, you make 26 half-payments, which equals 13 full payments. This calculator models the annual extra payment as an equivalent monthly principal prepayment. On a $300,000 loan at 6.5%, that saves about 5 years and 10 months. Some lenders offer formal bi-weekly programs; others let you send extra principal on your own schedule.

The calculator above models all three. You can combine an extra monthly amount with an annual lump sum for the fastest payoff. Enable the bi-weekly toggle to automatically calculate the one-extra-monthly-payment-per-year equivalent, or turn it off to enter your own custom monthly extra amount.

Making extra principal payments and getting a mortgage recast are two different strategies with different goals. Extra payments shorten your loan term and reduce total interest while keeping your monthly payment the same. A recast takes a lump sum payment and has the lender re-amortize your remaining balance over the original remaining term, which permanently lowers your monthly payment but keeps the original payoff date.

Many homeowners combine both: make extra payments for several years to build equity, then request a recast when you want lower monthly overhead. The recast reduces your required payment, but you can continue making extra payments on top to still pay off early. For a detailed model of how a recast works, use our recast calculator.

One warning: some lenders apply extra payments to future interest or hold them in suspense instead of applying them to principal. Always specify that extra payments should go to principal. Check your next statement to confirm the balance dropped by the full extra amount.

Enter your current loan balance, interest rate, and remaining term. Then set your extra payment strategy:

• Slide the extra monthly payment to model adding a fixed amount to every payment
• Slide the annual lump sum to simulate a yearly principal injection from bonuses, refunds, or side income
• Toggle bi-weekly payments to see the impact of the half-payment-every-two-weeks approach

The calculator instantly shows your new payoff month, total interest saved, and a side-by-side comparison of the standard schedule against the accelerated timeline. The chart visualizes how the accelerated balance line drops below the standard line and reaches zero years earlier. Use the Export CSV button to download the full accelerated schedule for your records. All calculations run in your browser. No data leaves your device.

The standard amortization schedule is calculated using the formula M = P[r(1+r)^n]/[(1+r)^n - 1], where P is your loan balance, r is the monthly interest rate, and n is your remaining number of payments. The accelerated schedule is built month by month: we apply your extra monthly payment, the monthly equivalent of a bi-weekly plan, and any annual lump sum to principal, recalculate interest on the reduced balance, and repeat until the loan reaches zero.

Interest for each month is always the remaining balance multiplied by the monthly rate (annual rate divided by 12). Every dollar of extra payment reduces principal immediately and permanently. The interest savings you see are the guaranteed difference between the total interest you would pay on the standard schedule versus the accelerated schedule. All calculations run in your browser. No data leaves your device.