Mortgage Payoff Calculator

Quite a lot, because mortgage interest is front-loaded. In the early years, the vast majority of each payment goes to interest. An extra principal payment early on eliminates many future interest charges. On a $300,000 30-year loan at 7%, an extra $200/month saves roughly $68,000 and cuts 7 years off the loan.

It depends on your lender. Many lenders apply extra payment to next month's payment by default — which does not save you money. To apply it to principal, you typically need to write "apply to principal" in the memo field of your check, or select "principal-only" in your lender's online portal. Confirm with your servicer before assuming.

Paying half your monthly payment every two weeks results in 26 half-payments per year — 13 full payments instead of 12. The extra full payment each year goes entirely to principal. This is equivalent to adding 1/12 of your monthly payment (~8.3%) as an extra payment each month. Enter that amount as your "extra monthly payment" in the calculator above.

At today's rates (6–8%), paying extra on a mortgage is a guaranteed return equal to your interest rate. If your mortgage is at 7% and you expect equity markets to return 8–10%, investing slightly edges out mathematically — but the market return is uncertain. A practical approach: max your 401(k) match first (that's a guaranteed 50–100% return), then split extra money between paying down the mortgage and taxable investments based on your comfort with risk.