Mortgage Prepayment Calculator for Interest and Term Savings
Estimate how extra mortgage payments reduce payoff time and lifetime interest from the current loan balance and payment.
Enter the current balance, rate, scheduled payment, extra principal, and frequency to see interest saved and how many years come off the loan.
Mortgage Prepayment Calculator for Interest and Term Savings
Estimate how extra mortgage payments reduce payoff time and lifetime interest from the current loan balance and payment.
About the Mortgage Prepayment Calculator
The mortgage prepayment calculator starts from the balance you still owe, not from the original closing amount, and then layers extra principal on the current payment. That is the right framing after several years of amortization, a recast, or a prior lump sum. Enter the current loan balance, annual rate, current principal-and-interest payment, extra amount, and frequency. Original loan amount, original term, and remaining payment count are reference fields; the simulation uses current balance, rate, and payment until the loan is paid off.
Monthly interest is balance × r/12. Extra principal is converted to a monthly equivalent: monthly extras add as-is, biweekly extras use 26/12, and annual extras are divided by 12. The accelerated payment shown is the scheduled payment plus that monthly equivalent. Interest savings compare a run with only the scheduled payment against a run with extras. New payoff time and term reduction are in years with one decimal place.
Use the mortgage prepayment calculator when the remaining balance is no longer the original principal, when you want to send a one-time extra that you will repeat annually, and when you are choosing between rounding the payment up by $100–$300 and making a larger yearly reduction. Opportunity cost matters: extra mortgage principal is a guaranteed return equal to the note rate, after tax effects, but it is not liquid. Keep an emergency fund before accelerating the loan.
If cash flow varies, model a conservative extra you can repeat rather than a one-month spike that you cannot maintain. Prepayment penalties, recast rules, and biweekly-draft programs that create 13 monthly payments per year are outside this conversion. The 13-payment biweekly servicer product is not the same as adding a biweekly extra on top of a monthly draft. Recalculate after each statement, and confirm with the servicer that extra amounts post to principal rather than to prepaid installments.
Mortgage Prepayment Calculator Examples
These worked examples use the same current-balance payoff path as the mortgage prepayment calculator.
| Inputs | Result | Why it matters |
|---|---|---|
| $300,000 current balance, 6% rate, $1,798.65 payment, $200 extra monthly | Interest savings $91,173.95; new payoff 23.3 years; term cut 6.8 years | The same $200 extra used at origination still saves about $91,000 if the balance is still $300,000. |
| $350,000 current balance, 6.25% rate, $2,155.01 scheduled payment, $300 extra monthly | Interest savings $134,571.67; new payoff 21.8 years; term cut 8.2 years | A $300 extra on a 6.25% balance cuts a little more than eight years of scheduled interest. |
| $300,000 current balance, 6% rate, $1,798.65 payment, $2,400 extra annually | Interest savings $91,173.95; new payoff 23.3 years; term cut 6.8 years | Spreading $2,400 per year across 12 months matches the $200 monthly extra path. |
How to Use the Mortgage Prepayment Calculator
- Enter the current loan balance, annual interest rate, and current principal-and-interest payment from the latest statement.
- Enter the extra principal amount and whether it will be paid monthly, biweekly, or annually.
- Select Calculate to view interest savings, new payoff time, term reduction, and the accelerated payment.
- Update the current balance after each lump sum so the next estimate does not double-count principal already paid.
Mortgage Prepayment Calculator FAQ
Which balance should I enter?
Enter the current unpaid principal from the latest statement, not the original loan amount. Original amount is collected for context and is not used in the payoff simulation.
Are remaining payments used?
No. Remaining payments and original term are reference fields. The calculator pays the entered monthly amount until the current balance is gone.
How is a biweekly extra modeled?
The extra is multiplied by 26/12 to create a monthly equivalent added to the regular monthly payment. That is not identical to a servicer-managed biweekly draft that creates 13 full payments a year.
Should I include escrow in the payment?
No. Use principal and interest only. Escrowed tax and insurance do not reduce principal and would overstate prepayment savings.
Do extras trigger a penalty?
Some loans limit annual prepayments or charge a fee. The mortgage prepayment calculator does not apply a penalty; check the note or use the mortgage penalty calculator.