Calculator guide
Estimate how an extra monthly principal payment could shorten a fixed-rate mortgage payoff.
Formula or method
With monthly rate r and payment A, payoff months = ln(A/(A−Pr)) / ln(1+r), provided A>Pr; the calculator compares the result with the entered remaining term.
How to use this calculator
- Enter the current balance, rate, remaining years, and extra monthly amount.
- Review the new payment and estimated payoff time.
- Use the estimated months saved to compare the cost of making extra payments.
Worked example
A $300,000 balance at 6.5% with 25 years remaining has a base payment near $2,026; adding $200 produces a $2,226 payment and an estimated payoff in about 20.2 years.
Understanding the result
Every extra dollar is treated as an on-time principal payment. The estimate isolates repayment math rather than investment opportunity cost.
Limitations and assumptions
- Assumes a fixed rate, no fees, and that the servicer applies extra money to principal.
- Does not model payment dates, escrow, taxes, prepayment restrictions, or changing income.
Frequently asked questions
Does extra payment reduce interest?
Generally yes because principal declines sooner, but verify the servicer's payment instructions.
What if the payment is too low?
If it does not exceed that month's interest, the formula cannot produce a payoff schedule.
Should I always prepay?
Compare rates, liquidity needs, penalties, and other uses of cash before deciding.
Sources
Educational estimate only; not financial advice.