DIY Cost Tools
Mortgage Payoff Calculator
FINANCIAL CALCULATOR
Estimate how an extra monthly payment could change mortgage payoff time and interest.
How it works
The tool simulates monthly interest and payments twice—once with the scheduled payment and once with the extra amount—then compares the outcomes.
Formula
Monthly interest = remaining balance × annual rate ÷ 12. New balance = balance + interest − payment.
Worked example
A $250,000 balance at 6% with a $1,600 scheduled payment can be compared with a $1,800 payment after adding $200 monthly.
Important limits
- Confirm that your loan allows extra principal payments and that the servicer applies them correctly.
- Escrow, fees, daily-interest timing, adjustable rates, and prepayment penalties are excluded.
- Your lender’s official payoff quote can differ from the current principal balance.
Frequently asked questions
Is the extra payment required forever?
The comparison assumes the same extra amount every month until payoff.
Does paying principal earlier reduce interest?
Under this model, yes, because later interest is calculated on a smaller balance.
Sources and review notes
The CFPB explains that a payoff amount can differ from the current balance. Verify the actual amount with the loan servicer. Last reviewed September 29, 2026.