Free Mortgage Payoff Calculator

Imagine for a moment – not having a monthly mortgage payment. With this free early mortgage payoff calculator, you can see what impact making extra payments on your principal will have on the life of your loan.

This mortgage payoff calculator calculates different variables to give you a clear picture of how and when you can pay off your mortgage if you adjust your payments. The following information is evaluated:

  • Original Loan Amount
  • Extra Payments Towards Your Mortgage
    • One Time 
    • Monthly
    • Quarterly
    • Yearly
  • First Extra Payment Date
  • Original Loan Length
  • Mortgage Interest Rate

Mortgage Payoff Calculator Results:

When you enter your variables, the mortgage payment calculator will show you your current amortization payment schedule. In addition, it will show you the impact extra payments has on your interest and time savings. 

If you currently have a 4% interest rate and want to know how much time and money you will save if you refinanced to a lower rate, this financial calculator will help you decide if it makes sense financially to do it.

What Happens If You Make 1 Extra Mortgage Payment A Year?

I entered an original loan amount of $250,000 with a 3% annual interest rate on a 30-year fixed-rate mortgage for this scenario. The base monthly payment for this scenario was $1,054.01 per month. This does not count other fees that are commonly added in like homeowners insurance, taxes, etc.

Using the amount of $1,054.01 paid once each year, the payoff calculator shows I would save $17,542.19 in interest over the life of my loan. Also, I would pay off my loan three years and seven months earlier.

Is It Smart To Pay Extra Principal On Mortgage​?

From a numbers standpoint, if you are paying 4% in interest on your mortgage loan, financially speaking, it would make more sense to put your extra money into an investment. For instance, the stock market averages 7.9% returns on your money each year based on historical data. Paying off a 4% mortgage early will provide you interest savings, but you could make more money by investing.

With this being said, I chose to pay off my mortgage early because the financial security that comes from having a paid-off house is worth more to me than extra zero’s in a bank account. This is where personal finance differs for each individual. What works for me may not work for you. 

Here Is How Much You Can Save By Paying Extra On Your Mortgage:

If you have additional funds lying around, first make sure you are debt-free before deciding to start investing or paying off your mortgage early. If this is the case, if you do not make extra payments on your loan, check out how much money you will be paying in interest.

With the above scenario of a $250,000, 30-year fixed-rate, 3% interest rate, you will pay $129,443.65 in interest to the mortgage lender over the life of the loan! So your $250,000 house will actually cost you $379.443.65! 

mortgage payoff calculator

Wrapping It Up

Try different scenarios with this mortgage amortization calculator to see what happens if you make an extra mortgage payment every month, quarter, or year. If you decide to tackle your mortgage, make sure any additional amount is applied to the principal balance rather than the interest portion. 

Some companies will automatically apply the extra payment to the overall interest owed, which is not what you want to do. Also, some loans have prepayment penalties if you attempt to save thousands with an early payoff. Please speak with your lender and find out the best way to make additional payments in your best interest rather than theirs.