Mortgage Payoff Calculator

Extra principal payments can save tens of thousands of dollars in interest, because every extra dollar reduces the balance that future interest is calculated on. For example, on a $300,000 balance at 6.5% with 25 years remaining, adding just $100/month cuts about 2 years 8 months off the loan and saves roughly $38,700 in total interest. The larger your balance, rate, and remaining term, the bigger the payoff from extra payments.

Early is always better. In the first years of a mortgage, most of each payment goes toward interest rather than principal, so extra principal payments made early have decades to compound in reduced interest charges. The same extra payment made in the final years of the loan saves far less, simply because there is less remaining term for the reduction to matter.

Not always — you need to confirm with your lender. Some servicers apply extra payments to the next month's due date instead of reducing principal immediately, which erases most of the benefit. When you send an extra payment, specify in writing (or through your loan's online portal) that it should be applied directly to the outstanding principal balance.

A biweekly payment plan splits your monthly payment in half and collects it every two weeks, which results in 26 half-payments (13 full payments) per year instead of 12. That extra full payment each year is applied to principal, typically shaving 4-6 years off a 30-year mortgage and saving significant interest — similar in effect to adding roughly 1/12th of your payment as an extra amount each month.

It depends on your mortgage rate versus expected investment returns. If your mortgage rate is low (for example, 3-4%) and you can reasonably expect higher long-term returns from investing, investing may build more wealth. If your rate is high (6%+) or you value the guaranteed, risk-free return of eliminating debt and the peace of mind of an early payoff, prioritizing extra mortgage payments can make more sense.

Most conventional mortgages originated in recent years do not carry prepayment penalties, but some loans — particularly certain non-conforming, subprime, or older loans — do. Check your loan documents or ask your lender directly whether a prepayment penalty applies before committing to an aggressive extra-payment strategy.

Refinancing into a shorter term (like a 15-year loan) or a lower rate can also accelerate payoff and reduce total interest, but it comes with closing costs and a new fixed monthly obligation. Extra payments offer more flexibility since you can adjust or pause them anytime, while refinancing locks in a new required payment. Many borrowers compare both options — see our refinance calculator to model that scenario.