Two ways to plan an early payoff
Pay extra: choose an amount to add each month, and optionally a lump sum now, and see your new payoff date and the interest you save.
Pay off by a date: choose a target, such as “done in 15 years,” and the calculator finds the extra monthly amount that gets you there.
Start with your original loan amount, term and rate, plus the time left on the loan. The calculator works out today's balance from your payment history, assuming you've paid on schedule.
Should you pay off your mortgage early?
Paying ahead is a guaranteed return equal to your interest rate, with no risk. It makes the most sense when your rate is high, you already have an emergency fund, and you're getting any employer 401(k) match. If your rate is low, investing the extra may grow faster over time, though with more risk. Many people split the difference.
Before you prepay
- Check that your loan has no prepayment penalty. Most US home loans made since 2014 don't, but some do.
- Ask your servicer to apply extra money to principal.
- Keep enough cash on hand. Money paid into a house is hard to get back out quickly.
Example
On a $300,000, 30-year loan at 6.5% with 25 years left, paying it off in 15 years instead takes about $550 extra a month on top of the regular $1,896.20 payment.
Frequently asked questions
Is a lump sum or monthly extra payment better?
Dollar for dollar, a lump sum today saves the most, because it stops interest immediately. Monthly extras are easier to sustain. You can combine both in this calculator.
Does paying extra lower my monthly payment?
No. On a standard mortgage your required payment stays the same; the loan just ends sooner. Some lenders offer a “recast” that lowers the payment after a large lump sum, usually for a fee.
What about biweekly payments?
Paying half your payment every two weeks adds up to 13 full payments a year instead of 12. That's the same as adding one-twelfth of a payment each month, which you can model here as a monthly extra.