Enter Mortgage Details
Summary
Original Monthly Payment: -
Original Term: -
Accelerated Term: -
Total Interest Saved: -
Charts
Payment Plan
📘 Overview: Save Time and Interest on Your Home Loan
The Mortgage Payoff Calculator helps homeowners understand how additional monthly payments can shorten their mortgage term and reduce total interest paid.
This tool is ideal for:
- 🏡 Homeowners looking to be debt-free faster
- 📉 Budgeters aiming to minimize total interest
- 🔄 Refinancing scenarios comparing payoff strategies
- 📊 Planning long-term personal finance goals
🧮 Formula & Methodology
The standard monthly payment (P) is calculated using the amortization formula:
P = (r × L) ÷ [1 - (1 + r)-n]
- L = Loan amount
- r = Monthly interest rate (annual ÷ 12 ÷ 100)
- n = Total number of monthly payments
With an extra payment (E) added each month, the tool recalculates the repayment schedule, month-by-month, applying:
Effective Payment = P + E
Then it determines:
- 🕐 New payoff time (in months/years)
- 💰 Total interest saved
- 📉 Year-by-year balance reduction
📊 Example
Let’s say you have a €200,000 mortgage at a 3.5% interest rate over 30 years. Your normal monthly payment would be around €898.09.
If you add an extra €200/month:
- 🏁 Loan is paid off in ~21 years and 9 months instead of 30
- 💸 You save over € 37,656.29 in interest
This demonstrates the powerful impact of consistent extra payments over time.
📈 Charts & Payment Breakdown
- 📊 Payment Composition Chart: shows how each payment splits between interest and principal.
- 📉 Remaining Debt Chart: visualizes your loan balance over time.
- 📅 Yearly Payment Table: provides a detailed amortization summary.
❓ Frequently Asked Questions
How is the standard monthly mortgage payment calculated?
It uses the amortization formula:
P = (r × L) ÷ [1 - (1 + r)-n],
where L is loan amount, r is monthly interest rate, and n is number of months.
How do extra payments help reduce my loan term?
Extra payments reduce the principal faster, lowering future interest and shortening the loan term significantly.
How much interest can I save?
That depends on the loan size, interest rate, and the amount of extra payments. The tool estimates your savings in real-time.
Does this account for taxes and insurance?
No — this calculator focuses solely on loan principal and interest. Taxes and insurance should be factored in separately if needed.
Can I customize the compounding frequency?
Most mortgages use monthly compounding, which is supported here. Advanced options for custom frequencies may be added in future versions.
What’s the difference between accelerated vs. standard payoff?
The accelerated plan includes extra payments and shows how many months (or years) earlier you’ll be debt-free, along with interest saved.
Can I use this tool for refinancing analysis?
Yes! You can compare your original loan term and payments with a refinanced version using different interest rates and extra payments.