Mortgage Payoff Calculator

How to Calculate a Mortgage Payoff With This Calculator

To calculate how much extra you need to pay to pay off your mortgage early, enter the following information:

• Loan amount: Enter the original amount of your mortgage (not the outstanding balance).
• Loan term: Use the dropdown to select the original loan term (10, 15, 20, 25 or 30 years).
• Interest rate: Enter your mortgage interest rate.
• Remaining loan term: Enter the remaining loan term in years and months.
• Early payoff term: How soon would you like to pay off your mortgage? For example, if there are 19 years left on your mortgage and you want to pay it off in 15 years, enter 15.

When you click the Calculate button, you'll see the following results for your current and new mortgage payoff dates:

• Payoff date: The date your mortgage will be paid off
• Monthly payment: The monthly payment required to pay off your mortgage by the payoff date
• Total paid: The total amount of principal and interest you'll have paid when your mortgage is paid off
• Total interest paid: The total amount of interest you'll pay over the life of the loan

You'll also see these results for the new mortgage payoff:

• Extra monthly payment: How much additional principal you'll need to pay per month to pay off your mortgage early
• Total savings: How much interest paying off your mortgage early will save you over the life of the loan

You can play around with different mortgage payoff dates to compare savings and find a monthly payment amount you can realistically afford.

Learn more: How Does Mortgage Interest Work?

Compare mortgage rates

Check today’s rates to find the best loan offers. Staying updated on current rates helps you secure a competitive mortgage and save more over time.

What to Consider Before Paying Off Your Mortgage Early

Paying off your mortgage early helps you build equity faster and can save you significantly on interest, but it's not always the best option. Consider these factors to decide whether paying off your mortgage early makes sense.

• Credit card debt: Interest rates on credit cards are much higher than mortgage interest rates. Your money may be better spent on paying down high-interest credit card debt than on paying off your mortgage early.
• Mortgage interest rate: If your mortgage interest rate is low, investing your extra funds could make more sense than accelerating your mortgage payoff. Of course, returns on investments aren't guaranteed, but the S&P 500 has returned an average of 10.3% annually over the past 20 years, according to Vanguard.
• Your financial goals: Paying off your mortgage early is an admirable goal, but it's also important to build a solid emergency fund, save for retirement and achieve your other financial objectives. Ensure you're on track to reach these and other goals, such as saving for your children's college funds, before you decide to pay off your mortgage early.
• Prepayment penalties: Some lenders charge a prepayment penalty for paying your mortgage off early. If this is the case, you'll need to weigh the potential savings from an early mortgage payoff against the penalty fee. Your loan documents should state whether there's a prepayment penalty and how it's calculated.

If you want to pay off your mortgage early, go over your budget and look for places to cut back so you can increase your monthly payment. For example, you might find ways to reduce nonessential expenses or look into making more money.

Learn more: Should I Pay Extra on My Mortgage Each Month?

Factors That Affect Your Mortgage Payment

There are four main factors that affect your mortgage payment: principal, interest, taxes and insurance, or PITI. Depending on your situation, other factors may impact your payment amount as well.

• Principal: This is the amount you borrow from your mortgage lender. A portion of each monthly mortgage payment goes toward paying down principal. At the beginning of your loan term, most of your monthly payment goes toward interest; as time goes on, the balance shifts until most of your monthly payments go toward principal.
• Interest: Your lender charges interest on your loan principal; part of each monthly mortgage payment goes toward paying interest. Your loan's interest rate and whether you have a fixed-rate or adjustable-rate mortgage also affect your monthly payments. Fixed-rate mortgages have the same interest rate for the entire loan term. Adjustable-rate mortgages (ARMs) have a fixed rate for an initial period; after that, your interest rate may increase or decrease depending on market rates.
• Taxes: Mortgage lenders often include a prorated amount for property taxes in your monthly mortgage payment. The lender keeps this money in an escrow account and uses it to pay your property taxes when they're due.
• Homeowners insurance: When you have a mortgage, the lender requires you to get homeowners insurance to protect the property. Many lenders include your home insurance premiums in your monthly mortgage payment. As with taxes, they use escrow accounts to hold the money and pay your premiums.
• Private mortgage insurance (PMI): Mortgage insurance protects the lender if you don't pay back your loan. If your loan amount is more than 80% of the home's value, lenders usually require PMI and include the cost in your mortgage payment.

Tip: If you use an escrow account, your mortgage payments may go up or down when your taxes and insurance premiums change, even if you have a fixed-rate mortgage.

How to Pay Off Your Mortgage Early

If you decide to pay off your mortgage early by increasing your monthly payments, it's essential to make sure the additional amount gets applied to your loan principal. Lenders may put extra payments into your escrow account, which won't help pay off your mortgage faster. Check with your lender to see if the additional money is automatically applied toward principal or if action is required on your part to make that happen.

Increasing your regular monthly payment isn't the only way to pay off your mortgage early. You can also:

• Put windfalls toward extra payments. Making extra principal payments whenever you receive a windfall, such as a work bonus or a tax refund, can help chip away at your principal.
• Make biweekly payments. Splitting your monthly payment into two biweekly mortgage payments results in one extra mortgage payment per year with minimal impact on your budget. Check to see if your lender allows biweekly payments and how to set this up.
• Have PMI removed. PMI is automatically removed once you have 22% equity in your home or are halfway through your mortgage, but you can also ask your lender to remove PMI once you have 20% equity in your home. If you believe your home value has increased, you can ask your lender to reassess your equity, although this may require a home appraisal. Once PMI payments are eliminated, you can put that money toward extra principal payments.
• Refinance your mortgage. You can pay off your mortgage faster by refinancing your mortgage into a shorter loan, ideally at a lower interest rate. You'll need to consider closing costs, origination fees and how long you plan to stay in your home to decide whether refinancing is worth the cost.

Learn more: When Should You Refinance Your Mortgage?

The Bottom Line

Paying off your mortgage is a major accomplishment, and doing so early can help you minimize expenses, build home equity faster and reduce the total interest you'll pay. Evaluating your budget will help you decide whether you can pay off your mortgage early without compromising other financial goals.

As you assess your finances, be sure to pay attention to your credit. Having a good credit score can help you qualify for favorable rates and terms on mortgage refinancing and other types of credit. Check your Experian credit report and FICO^® Score^Θ for free to learn what's impacting your credit score the most and what you can do to improve your credit.