π¦ Mortgage Payoff Calculator
Calculate interest savings, shortened term, and new monthly payment after making an extra principal payment. Everything runs locally: Loan Amount and Annual Interest Rate are processed on your device, never sent to a server β no data uploaded.
π Loan Information
π° Extra Payment
π Results
π How to Use
The Mortgage Payoff Calculator helps you evaluate the financial impact of making an extra principal payment, including interest savings and term reduction.
Step 1: Enter Loan Information
Enter your loan amount, annual interest rate, and loan term. You can find these in your loan agreement or mortgage statement.
Step 2: Enter Months Paid
Enter how many months you've already been paying. For example, if you're 3 years into the loan, enter 36.
Step 3: Enter Extra Payment
Enter the lump sum you plan to pay toward principal, and choose your strategy: reduce term (same payment, pay off sooner) or reduce payment (same term, lower monthly).
Step 4: View Results
Click "Calculate Savings" to see your interest savings, new payment/term, and detailed comparison data.
π― Use Cases
- Payoff Decision: Calculate exact savings to decide whether an extra payment makes sense.
- Strategy Comparison: Compare "reduce term" vs. "reduce payment" strategies.
- Financial Planning: Evaluate whether to invest or pay down the mortgage.
- Progress Tracking: Understand your current payoff progress and remaining interest.
π‘ Calculation Details
Amortization Formula: Monthly payment = Principal Γ monthly_rate Γ (1+monthly_rate)^n / [(1+monthly_rate)^n - 1], where n = total months.
Prepayment Logic: First compute the remaining principal after the months already paid. Then subtract the extra payment from the remaining principal and recalculate the new payment schedule.
Disclaimer: This tool uses standard amortization formulas for reference only. Actual results may vary due to bank-specific rules, fees, or prepayment penalties.
β FAQ
Is making extra payments worth it?
It depends on your mortgage rate vs. your investment return rate. If your mortgage rate is higher than what you'd earn investing, paying extra usually makes financial sense. Use this calculator to see the exact numbers.
Reduce term or reduce payment?
Reducing the term saves more interest because the principal is paid off faster. Reducing the monthly payment provides cash flow relief but saves less total interest. If you can afford the current payment, reducing the term is usually the better financial choice.
Is the calculation accurate?
This tool uses standard amortization formulas for reference. Your bank's actual calculations may differ due to specific rules, rounding, or prepayment fees. Always verify with your lender.