Calculate interest savings, shortened term, and new monthly payment after making an extra principal payment. All processing happens locally in your browser — no data uploaded.
The Mortgage Payoff Calculator helps you evaluate the financial impact of making an extra principal payment, including interest savings and term reduction.
Enter your loan amount, annual interest rate, and loan term. You can find these in your loan agreement or mortgage statement.
Enter how many months you've already been paying. For example, if you're 3 years into the loan, enter 36.
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).
Click "Calculate Savings" to see your interest savings, new payment/term, and detailed comparison data.
Amortization Formula: Monthly payment = Principal × monthly_rate × (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.
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.
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.
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.