Mortgage Payoff Calculator

This Mortgage Payoff Calculator will help you determine how much faster you can pay off your mortgage by increasing your monthly mortgage payments. It will also show how much interest you can save over the life of the loan by doing so. In addition, the calculator creates an amortization schedule showing how much faster your loan balance will decline with the additional payments compared to the normal amortization schedule with minimum payments.

Mortgage Payoff Calculator Overview

Most mortgage lenders allow borrowers to make additional payments against the principal balance of their mortgage without penalty. Such prepayments allow you to pay the mortgage off more quickly and reduce your interest charges.

Prepayments reduce your interest costs in two ways. First, by shortening the time the mortgage is in place, you’re paying interest over a shorter period of time. More significantly, the additional payments more quickly reduces the mortgage principle the interest is calculated against, which has a compounding effect that causes the principle and interest charges to shrink even faster over time. This can potentially save you tens of thousands of dollars over the life of the mortgage and shave years off the term of your loan.

About the Mortgage Payoff Calculator

The calculator has four main sections. First, the top section where you enter the information about your loan and the additional amount you’d like to pay each month. Below that is a short summary showing your new monthly payments and comparative savings. Further down is a chart comparing the trends in your mortgage balance and interest payments over time with both your regular and additional payments.

At the top, there’s a green box labeled “See Report.” Clicking that will display a detailed amortization schedule showing exactly what your total payments, loan balances and accumulated interest payments will be over the life of the loan, on either a month-by-month or year-by-year.

Using the Mortgage Payoff Calculator

To use this calculator, begin by entering the years remaining on your mortgage, the length of your mortgage, the full amount you originally borrowed, the additional amount you’d like to pay each month and your mortgage rate.

For purposes of the amortization report, check whether you wish to see it displayed as a month-by-month or year –by-year breakdown.

The length by which your mortgage will be shortened will be seen in the blue box above the imputs and your total interest savings will appear to the right. You can use the green triangles to adjust any of the figures you enter and the results will update automatically.

A few things to note: It’s important to enter the original amount of your mortgage and not your current mortgage balance. The calculator will figure where you currently stand based on how long you’ve been making payments.

Include any closing costs that were rolled into the original mortgage – you want to enter the total amount you borrowed. Likewise, be sure to enter your mortgage rate and not the APR in the interest rate box to get a correct report.

If your payments have varied since taking out the mortgage – if you’ve missed payments or paid additional amounts – you can work around this by simply entering your current mortgage balance as the original loan amount and the number of years remaining on your loan in both the “years remaining” and “original mortgage term” boxes. This will provide you with a comparative report for the remaining time of your mortgage compared to making regular payments.

The “Mortgage Balances and Interest” section is a graph that compares how your mortgage principle balance will decline over time with making additional monthly payments compared to making just your regular monthly payments. It also shows how your accumulated interest costs will accumulate over time as well for both options.

Clicking on “View Report” will show full amortization schedules for both regular payments and making additional monthly payments. You may print out this report if you wish.

Mortgage Payoff Calculator Overview

Most mortgage lenders allow borrowers to prepay on the principal balance of their mortgage without a prepayment penalty. Paying off the mortgage balance early shortens the period of time that the mortgage is in place. Paying off your mortgage early also decreases the total amount of interest that you will pay on the mortgage. Paying off your mortgage early can potentially save you thousands of dollars.