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Mortgage Payoff
See what extra principal does to your end date — a little every month, a lump sum, or a biweekly plan — and what each one saves you in interest.
What you’d add
Twenty-six half-payments a year is thirteen monthly payments, not twelve — so it quietly adds $138 a month. Ask your servicer before signing up for one: some charge a fee to set it up, and you can do the same thing free by adding that amount yourself.
What this means
Adding $200 a month takes 5 yr 3 mo off the loan and $58,198 off what you hand the lender. Same house, same rate — the only thing that changed is that more of each payment lands on the balance instead of the interest.
Two things to get right when you send it, because a servicer will not guess. Tell them the extra is to principal — otherwise many will hold it and apply it to next month’s payment, which saves you nothing. And check your loan for a prepayment penalty before you send a big one; they are uncommon now and not extinct.
The harder question this cannot answer is whether the extra belongs here at all. Every dollar of extra principal avoids the interest that dollar would have been charged — 6.5% a year on this loan, for the rest of the term. That is money you keep, set by your loan contract rather than by anything happening in a market. It is still the wrong place for the dollar if you have no emergency fund, a credit card balance, or an employer match you are not claiming. Those come first. Where a mortgage lands after them depends on your rate, and a rate low enough makes this the last thing to hurry.
Money that goes into the house is also money you cannot easily get back out. Paying ahead does not lower next month’s bill — it shortens the loan — so a bigger balance in the bank and a slower payoff is sometimes the safer trade. And if the mortgage interest deduction is part of your thinking, ask a tax professional what you actually claim: the deduction only exists if you itemize rather than taking the standard deduction, and plenty of people with a mortgage do not.
Build on it
These are estimates to help you think — not personalized legal, tax, or investment advice, and not a promise of any result.
You already have the loan. This calculator answers the question that comes after that: what does sending more than the payment actually do? Enter today's balance, your rate and your principal-and-interest payment, add whatever extra you're thinking about, and it shows both loans side by side — the one you have and the one you'd have.
The answer is usually larger than people expect, and for a reason worth understanding. Extra principal doesn't just shorten the loan by the months you paid for. It stops interest from being charged on that money for every month left in the term, which is why $200 a month can move an end date by years.
How to use it
Use today's balance, not the original loan
The number on your latest statement, after however many years you've already paid. If you enter what you originally borrowed, every figure here will be wrong in the same direction — too long, too expensive.
Enter principal and interest only
If your payment includes escrow for taxes and insurance, leave that part out. Escrow money goes to the county and the insurer; it never touches the loan. Your statement breaks the two apart.
Try the three ways people actually pay extra
A fixed amount every month, a one-time payment from a refund or a bonus, or the biweekly plan — half the payment every two weeks, which works out to thirteen monthly payments a year instead of twelve. They stack, so you can test any combination.
Read the two end dates first
The interest figure is the headline, but the date is the decision. Being done in eleven years instead of nineteen changes what the rest of your fifties look like — that is the thing to weigh against whatever else the money could do.
Behind the numbers
Why early extra beats late extra
Interest is charged on what you still owe, so a dollar of principal paid in year three avoids interest for every remaining year of the loan, while the same dollar in year twenty-six avoids almost none. This is also why the first years feel like nothing is happening: on a new thirty-year loan, most of each payment is interest and only a sliver touches the balance.
Shorter loan, not smaller payment
Paying ahead does not lower next month's bill. The payment stays exactly where it is and the loan simply ends sooner. That matters more than it sounds: money you put into the house is hard to get back out, and if your income stops next year the servicer still wants the full payment, however far ahead you were.
Tell them it's principal
Extra money sent without instruction is often held and applied to the next scheduled payment, which saves you nothing at all — you have paid early, not paid down. Most servicers have a principal-only option online or a box on the coupon. Check the next statement to confirm the balance moved by what you sent.
Whether it belongs here at all
Every dollar of extra principal avoids the interest that dollar would have been charged, at your rate, for the rest of the loan. That is money you keep, and it is fixed by the loan contract rather than by anything happening in a market. It is still not automatically the best home for the money. A starter emergency fund comes first, then high-interest debt, then an employer match you aren't claiming. Where the mortgage lands after those depends on your rate and on what a paid-off house is worth to you, which is a judgment rather than a calculation.
The math behind it
Each month, interest is charged on what you still owe: the rate divided by twelve, times the balance. Your payment covers that interest first, and whatever is left reduces the balance. Extra principal goes straight to the balance, so the next month's interest is figured on a smaller number — and so is every month's after that. That compounding backwards is why the saving is bigger than the extra you put in. The end date is found by running the loan month by month until the balance reaches zero, once with the extra and once without.
Worked example
$240,000 left at 6.5%, paying $1,650 a month, is 24 years to go and $233,614 in interest from here. Add $200 a month and it becomes 18 years 9 months and $175,416 — 5 years 3 months and $58,198 saved. The extra costs $45,000 over those years and buys back $58,198.
One extra payment a year
If the arithmetic gets in the way, this is the version to remember: one extra payment a year takes a fresh thirty-year mortgage down to somewhere between 22 years 11 months and 26 years 6 months, depending on the rate — 3 years 6 months off at 3%, 5 years 10 months at 6.5%, 7 years 1 month at 8%. The higher the rate, the more it buys, because the interest you are avoiding is bigger. That is exactly what a biweekly plan does, and you can do it yourself by adding a twelfth of your payment each month.
Common questions
Is it worth paying extra on my mortgage?
It depends on your rate and on what else the money could do. A dollar of extra principal avoids the interest that dollar would have been charged, at your rate — worth a lot at 7%, much less at 3%. What is not in doubt is the order in front of it: a starter emergency fund, then high-interest debt, then an employer match you're leaving behind. Enter your own numbers above and you'll see what the extra buys; whether to spend it there is the part only you can answer.
Does a biweekly mortgage payment really work?
It works, and the mechanism is simpler than it sounds. Half your payment every two weeks is twenty-six half-payments a year, which is thirteen full payments instead of twelve — so it is an extra payment a year, arriving in small pieces. You can do exactly the same thing for free by adding a twelfth of your payment to each month's check. Some third-party services charge a setup fee and a monthly fee for this; that fee is pure cost for something you can arrange yourself.
Will paying extra lower my monthly payment?
No. The payment stays the same and the loan ends earlier. The one exception is a recast: you send a large lump sum, and the servicer works out a new monthly payment on the smaller balance, spread over whatever is left of the term. That does lower the bill. It usually costs several hundred dollars, not every loan allows it, and government-backed loans often do not — so ask your servicer what yours charges and whether it is even an option, before you send the money.
Should I pay off the mortgage or invest instead?
The comparison people make is your mortgage rate against what they expect to earn elsewhere, and the honest part of it is that only one side of that comparison is written into a contract — the interest you avoid is set by your loan, and nobody can tell you what an investment will do. There is also a part arithmetic doesn't reach: owning the house outright removes the biggest fixed bill in most household budgets, and you may value that differently. This is a real fork in the road — worth talking through with a financial professional who can see your whole picture, not just the loan.
Do I lose a tax break by paying my mortgage down early?
Ask a tax professional what you actually claim, because the answer is often nothing. Mortgage interest is only deductible if you itemize instead of taking the standard deduction, and plenty of households with a mortgage do not itemize at all. "You will lose the write-off" is one of the most repeated reasons not to pay a mortgage down early, and for a lot of people there is no write-off to lose. This calculator does not model any deduction, in either direction.
Is there a penalty for paying my mortgage off early?
Usually not, but check. Prepayment penalties became uncommon on owner-occupied mortgages after the rules tightened following the 2008 crisis, and they still exist on some loans — more often on a rental or investment property than on the house you live in. Your closing documents say, and your servicer can tell you in one phone call. Worth the call before you send a large lump sum.
Sources & references
Go deeper
The calculator gives you a number. The Home Ownership & Real Estate Brick teaches you what to do with it, in plain English. And if you’re not sure where to start, the free BrickScore Assessment checks your whole foundation in about 5 minutes.