Mortgage Payoff Calculator
Use the calculator for your own numbers and compare another example instantly.
Earlier principal reduction usually has more time to work
A lump sum reduces principal immediately, while monthly extras reduce the balance gradually. The better option depends on when the money is available and the loan terms.
Worked example
A $6,000 lump sum today can have a different effect than twelve $500 extra payments spread across a year, even though both total $6,000.
Liquidity matters too
A payoff comparison only measures the mortgage. Keeping cash available for emergencies or other goals may also matter to the decision.
Common mistakes
- Comparing different total extra-payment amounts.
- Ignoring when each payment occurs.
- Assuming mortgage interest savings are the only consideration.
Frequently asked questions
Is a lump sum always better mathematically?
If the same amount is paid earlier and applied to principal, it often reduces interest sooner, but exact results depend on the loan.
Can monthly extra payments still help?
Yes. Regular principal reductions can shorten payoff time and reduce interest.
How should I compare them?
Model both schedules with the same starting balance, rate and remaining term.