Mortgage Payoff Calculator: Pay Off Your Home Loan Early
Calculate how much time and money you can save by making additional principal payments on your mortgage. See your new payoff date and total interest savings with our free calculator.
Category: Financial
Frequently Asked Questions
Is it better to pay off my mortgage early?
Paying off your mortgage early can save you significant interest costs and provide financial freedom sooner. However, it might not always be the best financial decision if you have higher-interest debt, insufficient emergency savings, or could invest the extra money for potentially higher returns. Consider your complete financial picture and risk tolerance before making extra mortgage payments.
How much money will I save by making additional mortgage payments?
The amount you save depends on your loan balance, interest rate, remaining term, and the size of your additional payments. Even small extra payments can save thousands in interest over time because they directly reduce your principal, which decreases the base amount on which interest is calculated. Our calculator shows your exact savings based on your specific situation.
Should I make extra payments monthly, bi-weekly, or in lump sums?
All approaches will help you pay off your mortgage faster and save on interest. Monthly additional payments provide consistent principal reduction. Bi-weekly payments effectively give you 13 monthly payments per year instead of 12. Lump-sum payments (like from tax returns or bonuses) make large immediate reductions to your principal. The best approach depends on your cash flow and financial habits.
Will I face penalties for paying off my mortgage early?
Some mortgages have prepayment penalties for paying off the loan early or making large extra payments. These penalties are more common in the first few years of the loan. Check your mortgage agreement or contact your lender to understand if your loan has any prepayment penalties and what the terms are before making significant additional payments.
Should I refinance or make extra payments to save money on my mortgage?
Both strategies can save money, but they work best in different situations. Refinancing is typically more beneficial when interest rates have dropped significantly since you obtained your mortgage. Making extra payments is usually better when rates haven't changed much or when you've already refinanced. Sometimes a combination of refinancing to a lower rate and then making extra payments provides the maximum benefit.