Mortgage Payoff Calculator
Use your own numbers after reviewing the example below.
Quick answer
Adding $200 per month to principal generally pays a standard amortizing mortgage off faster because each future month begins with a lower balance.
Formula or method
Step-by-step
- Start with the current principal balance.
- Use the remaining loan term and interest rate.
- Add $200 to each simulated monthly payment.
- Compare the accelerated schedule with the original schedule.
Worked example
For a $200,000 balance at 5.5% with 20 years remaining, the scheduled payment is about $1,375.77 before escrow. The payoff calculator estimates the exact time and interest saved by adding $200.
How to interpret the result
Treat the result as a loan-model estimate and compare it with your mortgage statement. Daily-interest loans, payment timing and lender procedures can change the result.
Common mistakes
- Using the original loan amount instead of the current balance.
- Using the original term instead of years remaining.
- Assuming escrow is extra principal.
Frequently asked questions
Is $200 extra better than one extra payment a year?
It depends on timing and amount. Monthly extra payments reduce principal throughout the year, while one annual payment is applied later unless made early.
Can I stop extra payments later?
On many standard loans, voluntary extra principal does not obligate you to keep paying extra, but check your loan terms.
Does this work for adjustable-rate loans?
A fixed-rate simulation can become inaccurate after a rate change.