Mortgage Payoff Calculator
See how making extra payments affects your mortgage. Enter your current balance, rate and remaining term, plus any extra monthly payment or lump sum, and the calculator shows how many years you'll cut and how much interest you'll save.
Enter mortgage details
Enter mortgage details and press Calculate savings.
How extra payments save money
Every pound or dollar of extra principal reduces the balance immediately. Because interest is charged on the outstanding balance, a smaller balance means less interest next month, so more of the regular payment goes to principal. The compounding effect accelerates as the balance falls.
Two common approaches:
- Extra monthly payment — a steady addition on top of the regular payment.
- Lump sum — a one-off principal payment, often from a bonus, inheritance or savings.
Check your mortgage terms first: some lenders cap overpayments or charge an early-repayment penalty.
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Frequently asked questions
Rule of thumb: if your investment returns after tax are higher than your mortgage rate, investing may come out ahead. If your mortgage rate is higher, overpaying gives a guaranteed, tax-free return equal to the interest saved. Many people prefer a mixture for peace of mind.
Depends on your mortgage product. In the UK, most fixed-rate mortgages allow 10% overpayment a year without penalty. In the US, many mortgages allow unlimited extra principal. Read your terms or ask your lender — early-repayment charges can wipe out the savings.