How to calculate a faster mortgage payoff
Enter the current loan balance as the home price, set the down payment to zero, then enter the note rate, remaining term and extra monthly principal. The extra-payment view compares the scheduled loan with the accelerated plan. Results are estimates; your servicer's daily interest, payment timing and escrow handling can create small differences.
Extra-payment scenarios worth comparing
- Monthly extra principal: test $100, $250, $500 or an amount that fits your cash-flow plan.
- Biweekly equivalent: compare one additional monthly payment per year with a true servicer-supported biweekly plan.
- Five-year target: increase extra principal until the modeled payoff date is about five years earlier.
- Payoff versus investing: compare the guaranteed interest avoided with the uncertain, taxable return of an alternative investment.
Before sending extra principal
Confirm that your loan has no prepayment penalty, maintain an emergency reserve, and tell the servicer to apply the additional amount to principal. Paying a mortgage by credit card usually adds fees or cash-advance risk and is not the same as making an extra principal payment.
Also compare the amortization calculator, the mortgage payoff strategy guide, and the payoff-versus-investing guide.