Mortgage Prepayment & Early Payoff Calculator (US)

On a $320,000 loan at 6.5 % for 30 years, the regular payment is about $2,023. Adding $200 a month from the first payment pays the loan off after 281 payments instead of 360, 6 years and 7 months sooner, and saves about $105,429 in interest. The earlier you start, the more you save, because the extra cuts the balance that interest is charged on for every month that follows.

No. In India, paying off a loan before its term ends is often called "foreclosing the loan", so you may see a "mortgage foreclosure calculator" meaning an early payoff calculator. In the US, foreclosure means something very different: the lender takes action to recover the debt by selling the home, usually after the borrower stops paying. Paying off early is your choice and closes the loan; you own the home free of the mortgage.

Yes, because 26 half-payments a year add up to 13 full payments instead of 12. On the $320,000 example that pays the loan off in about 24 years 2 months and saves about $93,000 in interest. Check how your servicer handles it: some apply each half-payment when it arrives, some hold it until the full payment is there, and some third-party programs charge a fee. Paying one-twelfth extra each month gets nearly the same result with no special program.

Most US mortgages have none. Under federal rules for most mortgages, a prepayment penalty is allowed only on a fixed-rate qualified mortgage that is not higher-priced, is capped at 2 % of the amount prepaid in the first two years and 1 % in the third, and is not allowed after three years. FHA lenders must accept a prepayment at any time and in any amount, VA loans can be prepaid without a premium or fee, and USDA guaranteed loans cannot require one. State law can be stricter. Check your note and Closing Disclosure.

You can ask your servicer in writing to cancel PMI once your balance reaches 80 % of the home's original value, and extra payments get you there sooner. You need a good payment history and to be current, and the servicer can ask for proof the home hasn't lost value. If you don't ask, PMI ends automatically when the original schedule reaches 78 %, and extra payments don't move that date. Choose either rule under More options & assumptions.

Ask your servicer for a payoff statement. For most home loans it must be sent within 7 business days of your written request. It shows the balance, interest up to the payoff date and any fees. This calculator's payoff amount is the balance after the payment you choose plus any fee and penalty you enter, so it is close but not exact.

Your servicer must generally refund what is left in the escrow account within 20 days of the payoff, not counting weekends and legal public holidays, unless you agree to move it to the escrow account of a new mortgage with the same lender or servicer. After payoff you pay property tax and home insurance yourself.

Yes. When you pay extra, tell your servicer the extra is for principal only, through its website, a note on the payment or a call, and check the next statement. Otherwise it may be held or treated as an early regular payment, which doesn't cut your interest the same way.

Money paid earlier saves more interest, because it stops interest from being charged on it for longer. A $20,000 lump sum with payment 12 on the $320,000 example saves about $92,635 and ends the loan after 305 payments. Try different amounts and timings here and compare the interest saved.

Use the Mortgage Payment Calculator (US) to work out your monthly payment with property tax, home insurance, PMI and HOA dues and the full amortization schedule. This page starts from the same inputs and adds extra payments and early payoff.