Early Mortgage Payoff Calculator
See exactly how much interest you save and how many years you cut with extra monthly payments.
How Extra Mortgage Payments Work
Every extra dollar you pay reduces principal directly. Since interest is calculated on the remaining balance, reducing it faster means less interest accrues each month. The savings compound over time - each extra payment shifts more of all future payments toward principal. On a $280,000 loan at 6.75%, just $200/month extra saves over $60,000 in interest and cuts about 5 years off the loan.
How do I make sure extra payments go to principal?
Specify "principal only" in writing or on your payment portal when making extra payments. Without this, some servicers apply them to future months instead.
Is it better to pay extra or invest the difference?
If your rate is 6.75%, paying down the mortgage gives a guaranteed 6.75% return. Investing might earn more over time but with volatility risk. Both are valid - the best choice is the one you will stick to.
Does paying off early affect my taxes?
Most homeowners now take the standard deduction ($27,700 MFJ in 2024) which exceeds mortgage interest deductions, so eliminating the deduction usually has no tax impact. Check with a tax advisor.